Novo Nordisk's Oral Wegovy Fuels Optimism but Underlying Challenges Persist

What happened

Novo Nordisk faced a difficult 2025, including a CEO dismissal and multiple guidance cuts as US market share declined amid competition from Eli Lilly and rising compounded GLP-1 usage. In early 2026, the oral Wegovy pill launch has shown strong initial prescription data, with weekly US scripts exceeding 20,000, surpassing internal targets and offering a potential growth catalyst. However, the company continues to grapple with US headwinds such as state Medicaid coverage rollbacks for obesity drugs and pricing pressure, which compressed margins in 2025. The stock price has fallen roughly 40-50% from its peak, resetting expectations, but recent bullish predictions like The Motley Fool's 40% surge forecast highlight optimism around oral Wegovy. The DeepValue report maintains a 'POTENTIAL BUY' rating with a base case fair value of $65, contingent on oral Wegovy sustaining uptake and restructuring efforts stabilizing profitability.

Implication

If oral Wegovy prescriptions maintain above 20,000 weekly without cannibalizing injectables, Novo could stabilize GLP-1 revenue, supporting mid-teens EPS growth from a de-risked valuation. International operations, where obesity sales grew 83% in early 2025, remain a critical offset to US weaknesses and should be tracked for continued strength. Restructuring savings targeting DKK 8 billion annually by end-2026 are essential to protect operating margins above 40% amid elevated R&D and SG&A expenses. Key downside risks include additional state-level reimbursement cuts, increased compounded GLP-1 adoption, and pipeline setbacks for next-generation agents like CagriSema. Investors should consider scaling in near the $55 attractive entry point, trimming above $80, and closely watching quarterly script data and payer policy updates over the next 6-12 months.

Thesis delta

The Motley Fool's prediction of a 40% surge in 2026 aligns with the bull case in the DeepValue report but does not alter the core thesis, which already incorporates oral Wegovy's potential as a key catalyst. However, it underscores the need for critical scrutiny, as overly optimistic projections may overlook persistent US headwinds like pricing compression and reimbursement cuts that could cap upside. No fundamental shift is warranted; the investment case remains balanced between oral growth drivers and structural challenges, requiring continuous monitoring of prescription trends and margin stability.