Novo Nordisk (NVO Quick QuoteNVO - Free Report) shares have plunged 36.3% in the past three months. The massive sell-off of the stock was primarily due to a weaker-than-expected 2026 financial outlook, pipeline setbacks and impending price cuts for key drugs amid intensifying competition from arch-rival Eli Lilly (LLY Quick QuoteLLY - Free Report) in the obesity space.

Novo Nordisk is a dominant player in the cardiometabolic space, led by its blockbuster semaglutide-based (GLP-1) drugs, Ozempic (for type II diabetes [T2D]) and Wegovy (for obesity), which generated DKK 206.2 billion in 2025. While legal actions, tighter FDA oversight and strategic partnerships with telehealth firms may curb compounded alternatives, NVO’s structural growth challenges remain unresolved, as is evident from its 2026 outlook.

Novo Nordisk’s 2026 outlook is flattered by a one-off $4.2 billion reversal of U.S. 340B rebates, but this gain is excluded from adjusted metrics, revealing underlying weakness. On a core basis, the company expects sales and operating profit to decline 5-13% (CER), with FX headwinds adding further pressure. Even reported figures suggest largely flat sales and only modest profit growth, indicating limited momentum once non-recurring benefits are removed.

Growth in international markets, driven by GLP-1 adoption and Wegovy expansion, is likely to be offset by pricing pressure, competition and semaglutide exclusivity losses — especially in the United States, where demand and pricing are weakening. Higher R&D and commercial spending will further strain margins. Despite initial optimism around oral Wegovy, investor confidence has faded, as it is unlikely to meaningfully offset near-term challenges.

Lilly recently secured FDA approval of its oral GLP-1 drug, orforglipron, for adults with obesity or overweight with weight-related medical problems, marketed under the brand name Foundayo. The drug will compete directly with NVO’s Wegovy pill. Eli Lilly had launched Zepbound for obesity in December 2023, much later than NVO launched Wegovy injection a couple of years before. Still, Zepbound managed to capture much higher market share than Wegovy and surpassed the latter’s sales in 2025. If past trends hold, Lilly could effectively erase Novo Nordisk’s early lead in the oral GLP-1 market.

Eli Lilly has also strengthened its competitive position in obesity treatment after Zepbound 15 mg outperformed Novo Nordisk’s next-generation candidate, CagriSema, in the 84-week REDEFINE 4 study. Zepbound delivered 25.5% weight loss compared to 23% for CagriSema, causing NVO’s candidate to miss its non-inferiority goal and marking a clear win for Lilly. While Novo has already filed CagriSema and plans further studies, the results underscore Lilly’s current edge in efficacy.

The pressure extends beyond injectables, with Lilly’s Foundayo also beating Novo Nordisk’s Rybelsus in a phase III diabetes study, showing superior A1C reduction, weight loss and added convenience. Meanwhile, NVO’s planned 2027 U.S. price cuts across Wegovy, Ozempic and Rybelsus aim to expand access but risk squeezing margins, further intensifying competition across its core cardiometabolic portfolio.

However, it’s not all negative for Novo Nordisk. The company has one of the broadest cardiometabolic pipelines in the industry, supported by both in-house innovation and strategic partnerships and acquisitions. It continues to make steady progress across multiple next-generation candidates in diabetes and obesity. Backed by strong fundamentals and a still largely untapped global obesity market, Novo Nordisk retains meaningful long-term growth potential. To better assess the opportunity, it’s important to weigh the company’s key strengths against its near-term challenges.

Semaglutide — Still NVO’s Primary Top-Line Driver

Novo Nordisk’s past success has been driven by the sales of Ozempic (semaglutide) and Rybelsus for T2D, and Wegovy for obesity. The company boasts one of the industry's broadest diabetes and obesity care portfolios.

Ozempic and Wegovy are the major revenue drivers. Novo Nordisk is expanding access to Wegovy through broader distribution and partnerships with major U.S. pharmacies, telehealth providers and proprietary and third-party platforms to ensure patients can obtain authentic, FDA-approved treatments. This is expected to mitigate the compounded alternatives problem in 2026. NVO is also investing heavily in developing manufacturing facilities to increase production capacity for current and future Novo Nordisk GLP-1 treatments.

Novo Nordisk is expanding semaglutide's reach through new indications. Wegovy injection is now approved for reducing major cardiovascular events, easing HFpEF symptoms, and relieving osteoarthritis-related knee pain in obesity. NVO has also secured the approval of oral Wegovy — the first GLP-1 therapy in pill form for weight management — in the United States and was launched in early 2026.

Rybelsus’ label in the United States and the EU has been expanded to include cardiovascular benefits in T2D patients. A 7.2 mg Wegovy dose, showing up to 25% weight loss in the STEP UP study, has been approved in the EU and is currently under review in the United States. Label expansion is also being sought for Ozempic in treating peripheral artery disease in the United States and the EU.

NVO Expands Footprint in Rare Diseases and Liver Care

Beyond its GLP-1 portfolio, Novo Nordisk is broadening its presence in rare diseases. The company has submitted a regulatory filing seeking approval for Mim8 in hemophilia A in the United States. NVO has also secured both EU and U.S. approvals for Alhemo to treat hemophilia A and B, with or without inhibitors.

The FDA has also granted accelerated approval to Wegovy as the first GLP-1 therapy to treat noncirrhotic metabolic dysfunction-associated steatohepatitis with moderate-to-advanced liver fibrosis. This marked a significant milestone in liver care by offering patients a treatment that can both halt disease activity and reverse liver damage.

NVO Focuses on Next-Generation Drugs

Novo Nordisk is also developing several next-generation obesity candidates in its pipeline, especially targeting the lucrative U.S. market. Apart from CagriSema, NVO is gearing up to launch a dedicated late-stage program evaluating cagrilintide as a monotherapy for obesity.

Novo Nordisk is also gearing up to advance another next-generation candidate, amycretin, for weight management into late-stage development. The phase III program on amycretin is planned to be initiated soon. The company is also developing oral monlunabant in a mid-stage obesity study. It earlier signed a $2.2 billion deal with Septerna to develop and commercialize oral small-molecule medicines for treating obesity, diabetes and other cardiometabolic diseases. NVO recently signed a $2.1 billion partnership with Vivtex to develop next-generation oral biologic medicines for obesity, diabetes and associated comorbidities.

Novo Nordisk also received FDA approval for Awiqli, the first once-weekly long-acting basal insulin (icodec) for adults with T2D, to be used alongside diet and exercise for glycemic control. Already approved in several global markets, the drug’s U.S. clearance further strengthens Novo Nordisk’s diabetes portfolio and reinforces its position in the treatment landscape.

NVO’s Stock Price, Valuation & Estimates

In the past six months, Novo Nordisk shares have lost 33.8% against the industry’s 10% growth. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.

NVO Stock Underperforms the Industry, Sector & the S&P 500

Image Source: Zacks Investment Research

Novo Nordisk is trading at a discount to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 11.11 forward earnings, which is lower than 17.21 for the industry. The stock is trading much below its five-year mean of 29.25.

NVO Stock Valuation

Image Source: Zacks Investment Research

Earnings estimates for 2026 have improved from $3.34 to $3.37 per share over the past 60 days. During the same time frame, Novo Nordisk’s 2027 earnings estimates have increased from $3.31 to $3.41.

NVO Estimate Movement

Image Source: Zacks Investment Research

Here’s How to Play NVO Stock

Given the mounting headwinds, near to medium-term prospects for Novo Nordisk, currently carrying a Zacks Rank #3 (Hold), appear challenging, and caution is warranted. NVO is facing elevated stock price volatility amid a weaker 2026 outlook, rising competitive pressure from Eli Lilly, pricing headwinds and increased spending that could weigh on margins. Pipeline setbacks and uncertainty around the company’s ability to defend its leadership in the GLP-1 space further add to the risk-reward imbalance, suggesting investors may be better off staying on the sidelines until greater clarity emerges. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Competition in the obesity treatment market is intensifying as the space attracts new contenders beyond leaders Eli Lilly and Novo Nordisk. Smaller biotech firms, like Viking Therapeutics (VKTX Quick QuoteVKTX - Free Report) , are advancing GLP-1–based therapies to challenge the incumbents. Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Viking Therapeutics plans to advance oral VK2735 into phase III development for obesity in the third quarter of 2026.

Over the long term, however, the investment case remains intact. Novo Nordisk’s strong fundamentals, leadership in cardiometabolic therapies, and expansive pipeline — combined with the still underpenetrated global obesity market — position it well for sustained growth. For investors with a longer horizon, periods of weakness could present an opportunity, as the company retains the potential to generate meaningful wealth once near-term challenges stabilize.