Stock dips for third straight day amid revised guidance
Novo Nordisk A/S (NYSE:NVO) extended its decline on Wednesday, falling 7.25% to close at $50.03 per share. The drop marks the company’s third consecutive day of losses, triggered by a downgrade from Bank of America. The investment firm cut its rating from “buy” to “neutral” and lowered the price target from 550 to 375 Danish kroner.
The move followed Novo Nordisk’s updated financial guidance, which projected slower growth for the remainder of the year. The company now expects full-year sales growth between 8% and 14%, down from its earlier estimate of 13% to 21%. Similarly, operating income is forecast to grow 10% to 16%, compared to the previous range of 16% to 24%.
Blockbuster drug outlook weighs on forecasts
The revised projections reflect weaker-than-expected demand for Novo Nordisk’s high-profile drugs, Wegovy and Ozempic. The company cited several factors impacting sales, including increased use of compounded GLP-1 medications, slower market expansion, and heightened competition in the weight-loss and diabetes treatment sectors.
In the U.S. market specifically, Wegovy sales are expected to underperform as compounded alternatives continue to gain traction. The company indicated these dynamics have created headwinds that are likely to persist into the second half of the year, putting additional pressure on growth targets.
Leadership transition as veteran executive takes the helm
Adding to the shifting landscape, Novo Nordisk announced a change in leadership. Maziar Mike Doustdar, a company veteran, will assume the role of CEO effective August 7, 2025. He succeeds Lars Fruergaard Jørgensen, who was removed amid growing concerns over the company’s strategic direction and recent performance.
The appointment comes at a critical time as the company navigates evolving competitive pressures and seeks to reassure investors about its long-term strategy. Doustdar, who has held multiple senior roles within Novo Nordisk, is expected to focus on stabilizing sales performance and refining the company’s market approach.
Investor sentiment shifts toward alternative opportunities
While Novo Nordisk remains a key player in the global pharmaceutical space, its recent stock volatility and lowered outlook have prompted some investors to explore other sectors. Notably, attention is shifting toward AI-related companies that may benefit from macroeconomic trends such as tariffs and supply chain realignment.
The contrast between Novo Nordisk’s current trajectory and the perceived growth potential in AI underscores a broader shift in investor priorities. As risk appetite adjusts, companies with exposure to emerging technologies and domestic manufacturing may present more compelling near-term opportunities.