Key insights
- An analyst projects a potential downside for Novo Nordisk (NVO) stock, estimating a price target of $25 based on a worst-case scenario analysis. The analysis considers a significant drop in adjusted operating profit and excludes a one-time legal reversal boost to EPS in 2026. A price-to-earnings (P/E) ratio of 9, typical for pharmaceuticals, is applied to the underlying business EPS to derive the target. This suggests bearish sentiment towards NVO, potentially impacting related pharmaceutical stocks.
The adjusted operating profit is expected to drop between 15% and 18%. If we take that 18% worst-case hit against the 2025 EPS of 3.49, the core business EPS falls to about 2.86. But there is a massive one-time catalyst coming: the 4.2 billion 340B reversal in Q1 2026. After a 21.5% tax hit, that adds roughly 0.74 back to the EPS.
So the math for 2026 in a worst-case scenario looks like this: the underlying business gives us 2.86, and the legal boost adds 0.74, bringing the total projected EPS to 3.60. Even though it looks like growth on paper because of the reversal, we have to ignore that boost to find the true valuation floor. If the market assigns a PE of 9 based on average in pharmaceuticals then the stock could easily bottom out around 30 dollars.
If we exclude the 0.74 tax hit from the EPS and stick to 9 PE, NVO can see 25$