Deutsche Bank cuts Novo Nordisk to Sell after 70% slide

Deutsche Bank ↗ 2.62% became the first major bank to issue an outright Sell rating on Novo Nordisk ↗ 1.58% since the Danish drugmaker's shares collapsed roughly 70% from their 2025 peak, cutting its price target by 9% to 265 Danish crowns from 290 crowns in a note published Thursday.investing+1

Analyst Emmanuel Papadakis said the downgrade reflects "persisting concerns on the scope for a return to growth in 2027 and a large cliff problem further out," citing the failure of cardiovascular drug ziltivekimab in a late-stage trial, limited upside from Medicare prescriptions, and mid-term revenue cuts in the high single digits.stocktwits+1

A Deepening Bear Case

The move marks Deutsche Bank's second ratings cut on Novo this year. The bank had already lowered the stock to Hold in February after disappointing R4 trial data. Papadakis described his latest call as a recognition that the stock's steep decline — from above $87 in 2025 to around $47 in Thursday trading — has not yet corrected for the competitive and pipeline challenges ahead.asktraders+1

Novo's second-quarter earnings earlier this month delivered a "mixed" result. While the company raised its full-year profit and sales outlook, investors zeroed in on a narrow sales miss for the oral Wegovy pill, which came in at 3.22 billion Danish crowns versus the 3.3 billion crowns analysts expected, and a trial setback for next-generation obesity drug CagriSema. Revenue estimates from Fiscal.ai show annual sales slipping from 309 billion crowns in 2025 to 299 billion in 2026 before edging up to 304.25 billion in 2027 — effectively flat over three years.investing+1

China Milestone Offers a Glimmer

On the same day as the downgrade, Chinese regulators accepted Novo's application to sell the oral version of Wegovy, opening a path into a weight-management market that JPMorgan estimates could reach 30 billion yuan (around $4.5 billion) within five to seven years, according to Reuters. However, Novo faces stiff competition from Eli Lilly ↘ 0.04%, which has already submitted its application for rival drug Orforglipron in China and plans to invest $3 billion in the country over the next decade.tradingview+1

What Comes Next

Papadakis noted that "information uncertainty remains high" ahead of Novo's Capital Markets Day, scheduled for September 21. The central question for investors is whether the Wegovy pill and the China opportunity can offset eroding competitive positioning in the GLP-1 market and looming patent cliffs on semaglutide — or whether, as Deutsche Bank now argues, the stock's decline remains incomplete.asktraders+1