A stock price 68% off its all time highs does not make it a quality value opportunity. In fact, in the case of Novo Nordisk, my base case (assuming market share rebound due to the success of their oral Wegovy)is still 56% over valued.
(edit: this model is utilizing DKK and the Danish stock exchange listed price for Novo Nordisk A/S (NOVO-B.CO) - ensure you adjust for currency)
- Current CPH price: $283
- Current NYSE price: $43.92
I think there is a real story for a Novo Nordisk turnaround and their pipeline finally looks attractive, but as an investment, I dont think I am interested unless I can purchase at sub $150/share.
Below is a snapshot of my SWOT analysis. I truly think it provides an attractive case for a turnaround. My issue with NVO, is not with the turnaround story, but the valuation I get to today when using metrics that support that turnaround.
Oral Wegovyperiod of single digit growth
increased competition
**IRR is blocked but should read -0.7%**
All in all, I am a fan of the company and I think their turn around story has legs. I personally wont be putting any money to work here until the price drops to my target of $150. At $150, a base case reacceleration generates an IRR that is significantly more attractive. I personally dont see this happening, but regardless, I will wait on the sidelines for now.
As always, please remember that this is not financial advice, my own personal opinions, and that you need to do your own research.