Novo Nordisk Q3 delivers as expected – supported by ongoing US election

Danish diabetes and obesity giant Novo Nordisk (CSE:NOVOb) continue its strong performance in the third quarter of the year, delivering a sales growth of 23% and reaching sales of 205 billion kroner in the first nine months of the year – just shy of market consensus. Earnings rose to 73 billion kroner, up 18% from last year, delivering on expectations.

Its blockbuster weight loss drug, Wegovy, continues to be at the centre of attention for investors. With sales now up 76% compared to last year's period and coming ahead of expectations, the drug's fast-track growth mode is solidified. The company's best-selling diabetes treatment, Ozempic, also continued to perform well, with sales climbing by 32%. These two blockbuster drugs now contribute over 60% of Novo Nordisk's total sales, underscoring their importance to the stock price.

With today's results, management is narrowing its full-year guidance and expecting the year's sales to grow 23-27%, while operating profit is set to grow 21-27%. After last year's three upward revisions and two so far this year, some investors could have hoped to see an upward revision repeat this quarter as well.

Despite today’s results roughly matching market expectations, Novo Nordisk is seeing an 8% jump in the stock price this morning. Earlier in the summer, similar 'as-expected' results would not have sparked such optimism. However, with the stock having faced a downward trend over the autumn, with the stock down 25% from its top, investors could view today's report as a potential turning point.

But another important factor is at play today. We should also not underestimate the impact of the ongoing US election. Throughout the autumn, investors have been wary of potential price regulation in the US pharmaceutical sector—a topic that the Democratic Party has been advocating. With the US market representing over 55% of Novo Nordisk's sales, any regulatory changes could significantly affect the stock valuation, making this a critical issue for investors. With the Republican Party now set for the White House, some investors are feeling a sigh of relief this morning.

eToro Nordic Market Analyst, Jakob Westh Christensen