Goldman Sachs on Monday downgraded Novo Nordisk to "neutral" from "buy" and trimmed its 12-month price target to DKK260 from DKK400 following the REDEFINE-4 trial readout and revised guidance, according to the bank's research note.
The new DKK260 target compares with a share price of DKK237.90, implying roughly 9.3% potential upside. For the U.S. American Depositary Receipt, Goldman set a $41 target compared with a current quote of $37.45, implying around 9.5% upside.
Sales and forecast revisions
Goldman substantially reduced peak sales expectations for CagriSema and for cagrilintide when used as monotherapy across diabetes and obesity, cutting the combined peak estimate to about $5.2 billion from about $11.8 billion. The bank now sees peak obesity sales for CagriSema at roughly $3 billion versus $7.5 billion previously, and peak diabetes sales at about $2.1 billion versus $4.3 billion under the prior view.
Following what Goldman described as inferiority versus tirzepatide in REDEFINE-4, the brokerage lowered combined CagriSema and cagrilintide monotherapy sales estimates by approximately 65% across its forecast horizon.
At the group level, Goldman cut revenue forecasts by about 6% on average across 2026-2030. Adjusted operating profit projections were reduced by roughly 10% on average over the same period, while adjusted EPS estimates were lowered by about 12% on average.
Exhibit data in the note detailed year-by-year revisions: adjusted sales for 2026 were slightly raised 0.5% to DKK283,284 million from DKK281,898 million, but were trimmed 2.5% in 2027, 6.2% in 2028, 10.1% in 2029 and 12.7% in 2030 compared with prior estimates. Adjusted operating profit was increased 0.7% in 2026 but cut 4.4% in 2027, 10.6% in 2028, 16.9% in 2029 and 21.7% in 2030. Adjusted diluted EPS was raised 8.4% in 2026 but lowered 3.4% in 2027, 9% in 2028, 15.3% in 2029 and 20.2% in 2030.
Valuation methodology adjustments
Goldman also tightened valuation assumptions. The applied price-to-earnings multiple was cut to 12.5x from 18.5x. In its discounted cash flow model the bank lowered the terminal growth rate to -2% from 0%.
The bottom-up DCF valuation was reduced to DKK265 per share from DKK430, based on a weighted average cost of capital of 7.1% and a -2% terminal growth rate. Using the revised multiple and modeling assumptions, Goldman settled on the DKK260 12-month target.
Product-level and portfolio notes
Goldman said it increased peak sales estimates for the oral Wegovy pill to about $7.8 billion from $6.2 billion and extended the modeled loss of exclusivity for that pill to 2036 from 2031. At the same time, the bank trimmed injectable Wegovy sales projections by about 7% on average across 2026-2030.
For zenagamtide, formerly referred to as amycretin, Goldman reduced peak diabetes sales forecasts to $4.5 billion from $8.5 billion while leaving obesity peak sales unchanged at $12.4 billion.
Market performance and context
Shares of Novo Nordisk have declined 27% year-to-date, Goldman noted. Since the stock was added to Goldman Sachs' buy list on May 30, 2024, the Copenhagen-listed NOVOb.CO is down about 74% while the FTSE World Europe index is up 23%. The U.S.-listed NVO is down about 72% versus the S&P 500 up 32% over the same period, per the note.
Goldman described the move as reflecting reduced expectations after the FY26 guidance and the REDEFINE-4 readout and characterized the shares as a "'show-me story'" given the updated data and estimates.
Takeaway
The bank's actions combine substantive downward revisions to product-level sales potential, several years of reduced revenue and profit forecasts, and a more conservative valuation framework. Together these adjustments underpin the shift to a neutral rating and a lower price target.