Novo Nordisk stock rating reiterated at Equalweight by Morgan Stanley

Morgan Stanley has reiterated an Equalweight rating and DKK550.00 price target on Novo Nordisk, maintaining a neutral stance as the company executes key strategic shifts. Novo Nordisk terminated its partnership with H&H, signaling management's view that compounded semaglutide has peaked and conversion to branded Wegovy is accelerating, supported by increasing NovoCare cash-pay adoption and positive new-to-brand prescription momentum in the U.S. The company is also advancing its pipeline, with CagriSema targeting a best-in-class profile via the REDEFINE-11 study and preparing for a significant oral semaglutide 25mg launch, anticipating FDA decisions for Wegovy in MASH (H2 2025) and oral semaglutide (Q4 2025).

Analysis

Morgan Stanley has maintained its neutral 'Equalweight' rating and a DKK550.00 price target on Novo Nordisk, reflecting a balanced view of the company's current execution and future pipeline. Operationally, Novo Nordisk is signaling confidence in its Wegovy franchise by terminating its partnership with H&H, based on management's belief that the use of compounded semaglutide has peaked. This transition to branded Wegovy is reportedly being supported by positive momentum in new-to-brand U.S. prescriptions and growing adoption of the NovoCare cash-pay program. Competitively, the company is actively shaping the narrative against rival Zepbound by highlighting real-world data that suggests a smaller weight-loss differential than in clinical trials, while also emphasizing Wegovy's broader clinical benefits. Looking forward, the pipeline holds significant long-term potential but with nuanced timelines. The CagriSema REDEFINE-4 study is positioned to show non-inferiority against tirzepatide, but management has guided that the longer-duration REDEFINE-11 study will be the key trial to establish a best-in-class profile. Furthermore, the company is preparing for a meaningful supply launch of oral semaglutide 25mg, with key FDA decisions for Wegovy in MASH and the oral formulation anticipated in H2 2025 and Q4 2025, respectively.

Key Decisions for Investors

• Investors should monitor U.S. prescription trends for Wegovy to verify management's assertion that the shift from compounded semaglutide is accelerating and that its competitive positioning against Zepbound is effective.
• It is crucial to differentiate between upcoming pipeline catalysts, recognizing that the CagriSema REDEFINE-4 trial aims for non-inferiority, while the more impactful best-in-class data is expected later from the REDEFINE-11 study.
• Given the neutral analyst rating balanced against positive operational momentum and significant pipeline catalysts expected in late 2025, current holders may find reason to maintain their positions, while potential new investors might await a clearer inflection point.
• Consider the potential upside from the oral semaglutide launch, as management's confidence in overcoming food restriction hurdles and achieving traction with primary care physicians could represent an underappreciated growth driver.