Novo Nordisk: HSBC Lifts Target to 320 Kroner as Morgan Stanley Warns on Semaglutide Concentration

HSBC lifted its Novo Nordisk target to 320 kroner while Morgan Stanley cut the stock to Underweight, trimming its target to 250 kroner.

Two of Europe's most closely watched research desks have staked out opposite positions on Novo Nordisk, and the gap between them says as much about the Danish drugmaker's pipeline as it does about the analysts themselves. HSBC raised its price target on the stock to 320 Danish kroner from 300 on Wednesday, while Morgan Stanley cut its rating to Underweight from Equal-weight on Friday and trimmed its target to 250 kroner.

The market sided with the bears, at least for now. Shares closed Friday at EUR 37.05, down 2.6% on the day, capping a week that saw the stock shed 7.6%. Over the past 30 days the decline reaches 8.0%, and year-to-date the equity has lost 16%, leaving it roughly a third below its 52-week high of EUR 54.86 set in January. An RSI reading of 34.1 puts the shares in oversold territory.

A September Full of Setbacks

The recent weakness traces back to a cluster of negative headlines. Novo Nordisk disclosed last Wednesday that it was halting two Phase III trials of ziltivekimab after an independent monitoring committee judged the prospects for the HERMES and ATHENA heart failure studies to be poor. It marks the second blow for the molecule, following the failure of the ZEUS trial in July.

A third Phase III programme for ziltivekimab, ARTEMIS, continues, with data not expected until the first half of 2027. For the third quarter of 2026, the company flagged a non-cash impairment charge, though it left its operating profit guidance for the current year untouched.

Adding to the pressure is the rollout of the Wegovy pill, which has weighed on the share price for just over a week and coincides with that 7.6% slide. Investors worry the oral version of the weight-loss drug is gaining traction more slowly than hoped, opening the door for rival Eli Lilly to capture market share with its own oral candidate, Foundayo.

Morgan Stanley's Core Concern

The downgrade from Morgan Stanley centres on concentration risk. Semaglutide, the active ingredient behind Ozempic and Wegovy, accounted for roughly 75% of group revenue in 2026, and the bank points to the patent cliff looming in Europe and the US in the early-to-mid 2030s. Even by 2031, when exclusivity protection begins to erode, the bank's models show semaglutide still generating 59% of sales — a cluster risk the analysts consider inadequately hedged.

The oral obesity franchise built around the Wegovy tablet is projected by Morgan Stanley to reach USD 10 billion in revenue by 2031. That sounds substantial, but in the bank's view it will not be enough to offset pricing pressure and intensifying competition. A survey of 200 US primary care physicians, alongside prescription data, points to share losses in both diabetes and obesity: after a strong first half of 2026, growth in the Wegovy tablet has softened. Rival Eli Lilly has captured the bulk of Medicare patients for Zepbound since launching its Bridge programme.

The ziltivekimab setback has acted as an additional drag — the stock has lost 3.4% since HERMES and ATHENA were discontinued, and the German launch of the Wegovy tablet just over a week ago provided no counterweight.

HSBC Takes the Other Side

HSBC's more constructive stance rests on the underlying business. The bank lifted its target on Wednesday, pointing to fundamental operating momentum, and its position stands in contrast not only to Morgan Stanley but also to Deutsche Bank, which reaffirmed its sell recommendation at the end of August.

Operationally, Novo Nordisk has proven more resilient than some analysts feared. In the second quarter, adjusted revenue rose 7% at constant currencies to DKK 78.488 billion, while adjusted operating profit climbed 11%. The company subsequently narrowed its full-year guidance to a range of 0% to minus 6% for both revenue and operating profit at constant exchange rates — a framework that leaves limited room for positive surprises.

Meanwhile, the buyback programme continues in the background. As of 4 September, Novo Nordisk had repurchased roughly 32 million B shares since early February at an average price of DKK 281.63, translating to a transaction volume of about DKK 9 billion within a twelve-month programme sized at DKK 15 billion. The repurchases have yet to visibly support the share price, but they may signal to investors that management retains confidence in its own valuation despite the downgrade.

London as the Next Test

The pivotal marker for investors is likely to be the capital markets day on 21 September in London. Management intends to present its growth strategy, research pipeline and operational direction — topics that carry particular weight given the recent trial setbacks and the debate over semaglutide dependence. Investors will be scrutinising the event for concrete answers to the patent cliff concerns, or for signs that the analysts' scepticism is warranted.

Until then, the market looks set to remain split between the cautious camp at Morgan Stanley and Deutsche Bank and the more optimistic read from HSBC.