HSBC downgrades Novo Nordisk A/S Sponsored ADR Class B (NVO.US) rating to "hold" as 2025 growth expectations sharply cut triggering a halving of the target price.

HSBC Bank has downgraded the stock rating of Novo Nordisk A/S Sponsored ADR Class B (NVO.US) from "Buy" to "Hold" due to the company's latest warning on the business outlook for 2025. Management of Novo Nordisk A/S Sponsored ADR Class B stated that its revenue growth rate may stabilize in the mid-single digits by 2025, which is significantly lower than previous market optimism. This rating change reflects concerns in the capital market about the company's growth trajectory and structural changes in its core markets, especially as the market for its GLP-1 class drugs, a core sales driver, is facing multiple challenges. HSBC analysis points out that illegal sales activities by US compound drug manufacturers continue to squeeze the market space of Novo Nordisk A/S Sponsored ADR Class B. Furthermore, delays in execution efficiency resulting from internal management changes have further shaken market confidence. These factors together are putting pressure on the short-term profit outlook. In terms of valuation model adjustments, HSBC has lowered long-term peak sales expectations for the main products of Novo Nordisk A/S Sponsored ADR Class B and has accordingly reduced profit forecasts for 2025 and 2026 by 5% and 16% respectively. Based on more cautious financial projections, the institution has drastically lowered the target price of Novo Nordisk A/S Sponsored ADR Class B stock from 680 Danish crowns to 360 Danish crowns, a decrease of 47%. It is worth noting that Novo Nordisk A/S Sponsored ADR Class B, as a leader in the GLP-1 drug revolution, has expanded from diabetes treatment to the global weight loss trend with semaglutide (the core component of Ozempic and Wegovy), becoming one of the most profitable pharmaceutical companies globally. However, the company recently lowered its full-year performance expectations: sales growth rate from 13%-21% to 8%-14%, and operating profit growth rate from 16%-24% to 10%-16%. This adjustment directly impacted the stock price and raised concerns about weakening demand for the "miracle weight loss drug". Meanwhile, the company announced a CEO succession plan. Current CEO Lars Fruergaard Jrgensen stepped down due to "pressure on stock performance", and he was succeeded by Maziar Mike Doustdar, who has over thirty years of international operational experience. This change has triggered mixed reactions among investors: supporters believe the new CEO has extensive institutional experience and can stabilize the situation, while skeptics argue that, facing challenges from competitors like Eli Lilly (LLY.US), Novo Nordisk A/S Sponsored ADR Class B needs a new face with experience in the US market.