NONOF - Novo Nordisk: My 'Hold' Thesis For 2024 - The Premium Must Be Justified

2024-03-07 13:05:47 ET

Summary

• Novo Nordisk had a strong performance in 2023, driven by a significant increase in obesity care sales and market leadership in the global diabetes market.
• The company plans to invest heavily in expanding its manufacturing base, with discussions of amounts exceeding 45B DKK.
• Despite the positive outlook, there are still risks involved, leading to a "HOLD" recommendation for NVO stock.

Dear readers/followers,

Unfortunately, Novo Nordisk ( NVO ) goes into my 2023 bag of the companies I was very wrong about. I underestimated this company's ability to outperform the market during an already overvalued time, and as a result, the RoR for the company was far better than the market - and I held no real stake in this company.

I've looked through the results and also the trends and what we may expect for the company going forward. As with most overvalued companies, I reach a conclusion here that the premium must be justified. The market seems to believe the current premium to the stock, which as of this morning is over 45-50x P/E normalized, is justified....

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