Novo Nordisk 1Q26 Earnings Beat but Guidance Only Slightly Increased

Overview

This report analyzes Novo Nordisk A/S' Q1 2026 performance, noting core profits exceeded market expectations while full-year guidance saw only a slight increase. Although increased Wegovy tablet inventory contributed positively to revenue, declining prices and reduced sales volumes in the US market led to year-over-year revenue declines for some products. The report maintains an Underperform rating, with a target price of DKK 175, implying significant downside from the current share price.

Core views

The core views of the report are as follows: 1. Novo Nordisk 1Q26 core P&L exceeded market expectations, mainly due to strong performance of products such as Ozempic and Wegovy. 2. Full-year sales and adjusted EBIT growth guidance was raised from previous -5% to -13% to -4% to -12%, but still below consensus market expectations. 3. Increased Wegovy tablet inventory made a significant contribution to revenue, but this impact is expected to gradually diminish in future quarters. 4. The report is optimistic about the GLP-1 product line but emphasizes competitive pressure potentially brought by patent expiry. 5. Target price is derived based on DCF valuation method and EV/EBITA multiple, implying approximately -38.6% downside. The report also mentions capital allocation plan, completed 25% of the DKK 15 billion buyback plan as of May 4, 2026.

Analysis framework

The report employs the following analytical methods: 1. Compare actual financial data with market consensus expectations to evaluate performance. 2. Analyze growth drivers of key products (such as Ozempic, Wegovy) and their impact on overall performance. 3. Calculate target price using DCF valuation model and EV/EBITA multiple, compared with peers. 4. Evaluate full-year performance outlook combining management guidance and market expectations. These methods help investors understand reasons for earnings beat and potential future risks.

Methodology notes

• Valuation MethodDCF Cash Flow Discounting

  Calculate target price using DCF model, considering terminal growth rate and WACC.

  DCF model estimates intrinsic value by forecasting future cash flows and discounting them to present value, suitable for companies with stable growth.

• Valuation MethodEV/EBITA Valuation

  Perform relative valuation based on EV/EBITA multiple.

  Evaluate whether valuation level is reasonable by comparing company's EV/EBITA multiple with peers.

• Industry/Industrial Analysis FrameworkOthers

  Analyze competitive landscape and patent expiry impact of GLP-1 product line.

  Focus on core product status in market and potential substitute threats, evaluate long-term growth potential.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• NOVOB.DC

  Primary subject covered by the report, benefiting from GLP-1 product line growth but facing patent expiry risk.

  Strengths

  Core products Ozempic and Wegovy continue to grow, 1Q26 performance exceeded expectations.

  Weaknesses

  Patent expiry risk, downward price pressure, intensified market competition.

  Comparison

  Relative to peers, Novo Nordisk holds leading position in GLP-1 field, but valuation is high.

  Risks

  Patent expiry, intensified market competition, USD exchange rate fluctuations.

Key data

• Total RevenueDKK 70 BnYoY -4% (constant FX), exceeding market expectation by 1%.
• Adjusted Operating ProfitDKK 33 BnYoY -4% (constant FX), exceeding market expectation by 14%.
• Gross Margin46.9%YoY down 300bps, but exceeds market expectation by 500bps.
• Wegovy Tablet Inventory ContributionDKK 1 BnAccounts for 90% of absolute revenue beat amount.
• Full-Year Sales Guidance-4% to -12%Slightly raised from prior guidance, but still below market expectation.

Impact & implications

The report believes that although 1Q26 performance exceeded expectations, the increase in full-year guidance is limited, and the positive impact of Wegovy tablet inventory may weaken in future quarters. Additionally, although the GLP-1 product line has long-term growth potential, it faces risks of patent expiry and intensified competition. Overall, current valuation has fully reflected optimistic expectations, leaving significant room for downward adjustment.

Risks

• Approval of Canadian generics may accelerate patent expiry impact.
• Weak demand in US market may lead to further revenue decline.
• Exchange rate volatility may negatively impact financial performance.

What to watch

• Depletion rate of Wegovy tablet inventory.
• Market share changes of GLP-1 product line.
• Evolution of competitive landscape after patent expiry.