To The Moon

$Novo-Nordisk A/S(NVO)$ upcoming fiscal Q3 2025 earnings report is scheduled for November 5, 2025, before the market open.

The overall tone heading into the Q3 2025 earnings is one of heightened scrutiny due to recent competitive pressures and a prior guidance cut.

Consensus Estimates

Novo Nordisk (NVO) Fiscal Q2 2025 Earnings Summary

Novo Nordisk's Q2 2025 results reflected strong underlying performance, driven by its blockbuster GLP-1 drugs, but were overshadowed by a significant downgrade to its full-year guidance, which caused the stock to plummet.

The company's strong top-line performance was largely driven by its GLP-1 franchise, but the market's focus was almost entirely on the substantial cut to the full-year outlook.

Lesson Learned from the Revised Guidance

The lesson from Novo Nordisk's sharply reduced 2025 guidance centers on the unexpected and persistent impact of competition and the high-stakes nature of the U.S. GLP-1 market:

1. The Underestimated Threat of Compounded Drugs

The Problem: The single largest factor cited by the company for the lowered guidance was the persistent and widespread use of unregulated, compounded GLP-1 alternatives in the U.S. market. Even after the FDA's compounding grace period ended, the volume of these cheaper, non-branded versions continued to hurt the uptake of branded drugs like Wegovy in the cash-pay channel.

The Lesson: Branded pharma companies must prepare for non-traditional and potentially disruptive competition, even from unregulated sources, especially when a blockbuster drug is prohibitively expensive. The demand for weight-loss drugs is so immense that high prices will inevitably create a robust grey market seeking to fill the void. Novo Nordisk's response includes focusing on direct-to-patient channels like NovoCare Pharmacy to offer lower-cost access.

2. Intensifying Competition from Eli Lilly

The Problem: The overall GLP-1 market is expanding slower than expected, and branded competition, particularly from Eli Lilly's superior-efficacy drug Mounjaro (tirzepatide), is gaining significant traction and market share, especially in diabetes.

The Lesson: First-mover advantage is fleeting when a rival offers superior efficacy. Despite having the first-to-market obesity drug (Wegovy), Novo Nordisk must invest heavily in its pipeline (e.g., oral semaglutide for obesity, CagriSema) and commercial strategy to compete with Eli Lilly's powerful combined offering.

3. Investor Sensitivity to Growth Deceleration

The Problem: The guidance cut, which was the second in 2025, sent the stock plunging (by as much as 28% in one day). This reaction was driven by lower growth expectations for both Wegovy and Ozempic in the second half of 2025.

The Lesson: In high-growth sectors, any sign of slowing momentum—even when a company is still growing at double-digit rates—will be punished severely by the market. For a company whose valuation is heavily dependent on the trajectory of a few star products, investors are demanding growth that meets or exceeds the highest possible expectations.

The guidance fundamentally serves as a cautionary tale: while Novo Nordisk continues to dominate the overall GLP-1 volume, the future of the value of that market share is under intense pressure from both below (compounding) and above (superior branded competition).

Key Metrics Investors Should Watch

The primary focus will be on the performance of the company's blockbuster GLP-1 drugs for diabetes and obesity, especially amid mounting competition.

Semaglutide Franchise Sales Growth:

• Wegovy (Obesity): Investors will scrutinize U.S. sales growth. The company faces stiff competition from Eli Lilly's Mounjaro/Zepbound and ongoing challenges from lower-cost compounded versions of semaglutide. Commentary on its U.S. market share and patient access strategies (like the exclusive CVS formulary position) is crucial.

• Ozempic (Diabetes): While a strong revenue driver, the market will look for any signs of slowed momentum due to the same competitive factors.

Updated Full-Year 2025 Guidance:

• NVO previously cut its sales and profit outlook in July 2025. Any further revision to the full-year guidance will significantly impact the stock. The market needs stabilization or an optimistic outlook to regain confidence.

Restructuring and Cost Management:

• The company announced a major restructuring plan, including 9,000 job cuts, with expected one-off restructuring costs of around DKK 9 billion (approx. $1.3 billion) in Q3 2025. Investors will look at the net financial impact of these costs on the quarter's results, and the expected long-term annualized savings.

Pipeline Updates (Oral Semaglutide/Amycretin):

• Any news on the development and potential launch timelines for next-generation obesity treatments, such as the high-dose oral semaglutide or the dual-agonist amycretin, could provide a positive long-term catalyst.

Novo Nordisk (NVO) Price Target

Based on 10 analysts from Tiger Broker offering 12 month price targets for Novo Nordisk in the last 3 months. The average price target is $65.74 with a high forecast of $100.00 and a low forecast of $45.00. The average price target represents a 33.86% change from the last price of $49.11.

Short-Term Trading Opportunities Post-Earnings

Given the current environment, the short-term trading opportunities are largely centered around a potential surprise relative to the low expectations and the prior guidance cut.

Key Risk Factors

1. Eli Lilly's Strength: Lilly's recent strong Q3 results for Mounjaro/Zepbound have raised the bar and increased pressure on NVO.

2. Compounded Drugs: The persistent use of unregulated compounded semaglutide versions in the U.S. continues to impact NVO's sales momentum and pricing power.

3. Pricing Pressure: Concerns over potential government negotiations (like Medicare pricing for semaglutide) also pose a risk to future profitability.

Conclusion for Short-Term Trading:

The stock currently has a Zacks Rank #4 (Sell) and a negative Earnings ESP, which generally suggests a higher likelihood of disappointment. Near-term risk is high. Short-term traders should prepare for potential high volatility and consider a strategy that anticipates a negative reaction unless sales for Wegovy/Ozempic show material upside and management provides a confident, stable outlook.

Technical Analysis - Exponential Moving Average (EMA)

We can see that NVO is experiencing a downward movement which suggest that market and investors are not confident of NVO able to navigate the competition and also to improve its sales momentum.

So we might want to watch the sales for Wegovy/Ozempic, if the sales can show a significant progress growth, and the management could provide a positive and confident outlook in its guidance, then we might see a recovery.

Summary

The Q3 2025 earnings analysis for Novo Nordisk (NVO) is dominated by heightened competition and low expectations following a previous full-year guidance cut.

Consensus: The market is forecasting revenue of $11.88 Billion and EPS of $0.77, a year-over-year decline in profit, driven by slower growth expectations. The negative Earnings ESP of -11.04% suggests a higher chance of a miss.

Key Metrics to Watch:

Wegovy & Ozempic Sales: Scrutiny will be on the U.S. sales momentum amid fierce competition from Eli Lilly's Mounjaro/Zepbound and the persistent impact of lower-cost compounded GLP-1 alternatives.

Guidance Update: Any further cut to the full-year 2025 sales and profit outlook would trigger a significant negative stock reaction.

Trading Opportunity: Near-term risk is high due to the low confidence. A beat and a reaffirmation/raise of guidance is the primary bullish catalyst, while a miss combined with a guidance cut would confirm fears and likely result in a sharp drop.

Appreciate if you could share your thoughts in the comment section whether you think NVO could navigate the competition from LLY, and continue to build on its sales momentum.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.