Novonesis: Still Too Expensive

2025-02-06 00:20:58 ET

Summary

• Novonesis, formed from Novozymes and Christian Hansen, is a strong business with stable margins and high ROIC, but recent growth rates have declined.
• Despite solid Q3/24 results, NVZMF's long-term growth has slowed, though management and analysts expect future acceleration in revenue and margin improvements.
• Intrinsic value calculations suggest the stock is not a bargain unless very optimistic growth assumptions are met, indicating cautious investment is advised.
• Novonesis remains a great long-term investment with a wide economic moat, but it's crucial to avoid overpaying for its shares.

Aside from the rather famous company Novo Nordisk A/S ( NVO ) from Denmark, there are a few other Danish companies worth mentioning as they also have a wide economic moat around the business and were great investments in the past. One of these companies is Novonesis A/S (NVZMF) (NVZMY) which is the result of a merger of Novozymes and Christian Hansen....

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