Novo Nordisk (NVO) Buy – Accumulate between $105-$120. Long Term 3-5 years 12-14% annual gain + dividends.
I had analyzed Novo around 2/12/2024 when I looked at close competitor Eli Lilly (LLY) and while realizing it was one of the best pharma companies, it was too expensive to wade in.
Lots of positives.
Market leadership in diabetes, strong singular focus.
Major competitive advantages of scale, brand recognition, pricing and operational efficiencies. One of the best operating margins in pharma even in lean years.
5-7 patent protected blockbusters in growing treatments like diabetes and obesity, through 2028-2031.
Solid pipeline at all stages with one possible approval this year.
Even at this price of $120, I do anticipate around 12-14% returns assuming a $5.74 EPS in 2027 at a P/E of 35 = $201, that’s around 13.7% per year.
Should we get it cheaper it’s even better plus there is the dividend.