Novo Nordisk A/S (NYSE: NVO) has become one of the most closely watched stocks among visitors to Zacks.com, drawing significant investor attention amid a turbulent recent stretch.
Shares of the Danish drugmaker have returned -10.2% over the past month, a sharp contrast to the Zacks S&P 500 composite’s +1.5% gain over the same period.
The Zacks Large Cap Pharmaceuticals industry, which includes Novo Nordisk, posted a gain of 4.4% during that same timeframe, widening the gap between NVO and its sector peers.
Novo Nordisk is expected to post earnings of $0.81 per share for the current quarter, representing a year-over-year decline of -20.6%, a figure that has weighed heavily on investor sentiment.
The Zacks Consensus Estimate for that quarterly figure has moved -10.3% over the last 30 days, signaling that analysts are actively revising their outlook downward in the near term.
For the current fiscal year, the consensus earnings estimate of $3.42 points to a year-over-year change of -13.6%, with that estimate having shifted -3.2% over the past month.
Looking further ahead, the consensus estimate for the next fiscal year also stands at $3.42, reflecting no projected earnings growth compared to the current year’s expected results.
On the revenue side, the consensus sales estimate of $11.39 billion for the current quarter implies a year-over-year decline of -3%, while full-year estimates of $45.57 billion and $46.65 billion suggest changes of -2.6% and +2.4% for the current and next fiscal years respectively.
In its most recently reported quarter, Novo Nordisk delivered revenues of $12.21 billion, a year-over-year increase of +4.5%, with the result beating the Zacks Consensus Estimate of $11.27 billion by +8.34%.
Earnings per share of $0.96 for that same quarter compared with $0.97 a year ago, yet the result still managed to deliver an EPS surprise of +17.07% above consensus expectations.
The company has beaten consensus EPS estimates in each of the trailing four quarters, and topped consensus revenue estimates in three of those four periods, demonstrating a reliable track record of outperformance.
Despite the downward earnings revisions, Novo Nordisk earns a Zacks Value Style Score of A, indicating that the stock is currently trading at a discount relative to its pharmaceutical peers.
Taken together, these factors have resulted in a Zacks Rank #3 (Hold) for Novo Nordisk, suggesting the stock may perform broadly in line with the wider market over the near term.
Investors weighing a position in NVO will need to balance the attractive valuation grade against the meaningful pressure on both earnings and revenue growth projections heading into the next fiscal year.
