Summary: JPMorgan has moved Novo Nordisk (NVO) from Overweight to Neutral and lowered its June 2027 price target to DKK250 from DKK350, citing clinical-trial outcomes for CagriSema that underwhelmed relative to a competing obesity treatment. The broker cut its sales and earnings forecasts for CagriSema and pared wider group revenue and EPS projections for the mid-to-late decade. Novo Nordisk shares have fallen materially over the last 12 months and are trading just above their one-year low.
JPMorgan’s downgrade reflects a reassessment of Novo Nordisk’s near- to medium-term commercial trajectory after the release of clinical data from the REDEFINE 4 trial and related diabetes studies. The REDEFINE 4 results showed that CagriSema produced a 23% average reduction in body weight over 84 weeks, compared with a 25.5% reduction reported for Eli Lilly’s tirzepatide in the same context. The bank also cited more limited effects on blood glucose in the REIMAGINE 2 and REIMAGINE 3 Type 2 Diabetes trials when evaluating the drug’s overall profile.
As a consequence of the clinical readouts, JPMorgan cut its CagriSema sales forecasts by 40% to 63% across the 2027-2030 horizon. The firm additionally trimmed revenue expectations for Novo Nordisk’s amycretin programme by between 1% and 23% through 2029-2030 to reflect anticipated lower price points. Those adjustments contributed to a reduction in the broker’s aggregate Novo Nordisk group sales forecasts of 2% to 16% for the 2026-2030 period.
The revised top-line outlook flowed through to earnings, with JPMorgan lowering its adjusted earnings-per-share projections by between 2% and 17% over the same multi-year window. Relative to external benchmarks, JPMorgan’s updated forecasts for 2026-2030 now sit 5% to 21% below Bloomberg consensus estimates and 4% to 25% beneath company consensus figures.
JPMorgan’s new price target - DKK250 for June 2027 - is based on a multiple of 13 times its 2027 estimated earnings per share and represents a roughly 15% discount to the wider pharmaceutical sector multiple, according to the firm. The bank’s model implies a 2027-2030 EPS compound annual growth rate of 6%, which it notes is in line with the European large-cap pharmaceutical cohort.
Market metrics cited by the bank show Novo Nordisk trading at a price-to-earnings ratio of 11.06 and holding a market capitalization of about $176 billion, alongside a reported dividend yield of 4.6%. The stock has slumped approximately 55% over the past year and was trading at $39.63 at the time of the latest reporting, marginally above its 52-week low of $39.34.
Independent valuation analyses referenced in market commentary indicate the shares may appear inexpensive at current levels, with fair value estimates pointing to meaningful upside potential. However, JPMorgan’s more conservative revenue and EPS trajectory underpins its move to neutral and the revised target.
Additional commercial and regulatory developments have compounded investor scrutiny. The recent trial outcome for CagriSema means the therapy did not meet the primary endpoint of demonstrating non-inferiority to tirzepatide in reducing body weight. Separately, U.S. regulators flagged the company for a television advertisement for Wegovy, finding the ad misleading and in violation of the Federal Food, Drug, and Cosmetic Act.
Analyst reactions beyond JPMorgan have been mixed. TD Cowen has maintained a Buy stance with a $70.00 target, while BMO Capital reduced its target to $45.00 but kept a Market Perform rating, citing what it described as a difficult quarter. Market commentary also highlights directional pricing pressure for Novo Nordisk of roughly 10% to 15%, driven by channel mix and other factors; company management, for its part, has pointed to potential volume benefits and possible upside if generic competition in some international markets is delayed.
Taken together, the clinical, commercial and regulatory updates have produced a more nuanced outlook for Novo Nordisk. The company faces headwinds to pricing and to the expected revenue contribution from a key investigational therapy, while several analyst houses offer divergent views on valuation and medium-term prospects.
Key points
- JPMorgan downgraded Novo Nordisk to Neutral and cut its price target to DKK250 from DKK350, driven by CagriSema trial results that were weaker than a competing therapy.
- JPMorgan reduced CagriSema sales forecasts by 40% to 63% for 2027-2030 and trimmed broader group sales and EPS forecasts across 2026-2030.
- The shares have fallen about 55% over the past year and trade near the 52-week low, while valuation metrics and dividend yield present mixed signals.
Risks and uncertainties
- Clinical trial performance - CagriSema’s failure to show non-inferiority in weight loss versus tirzepatide introduces uncertainty for future sales and adoption - this directly affects the pharmaceutical and healthcare sectors.
- Pricing pressure - directional declines of 10-15% driven by channel mix and other factors could reduce revenue even if volumes rise, impacting sector revenues and margins.
- Regulatory and promotional risk - a finding by U.S. regulators that a promotional advertisement violated the Federal Food, Drug, and Cosmetic Act adds compliance uncertainty for commercial activities.