Is Novo Nordisk Stock a Buy, Sell, or Hold as CEO Lars Fruergaard Jørgensen Resigns?
Novo Nordisk (NVO) is in focus on Friday after its long-time chief executive Lars Fruergaard Jørgensen announced his resignation following a mutual agreement with the board.
Fruergaard will remain with the pharmaceutical giant until it finds a successor to “support a smooth transition,” a press release confirmed on Friday.
Novo Nordisk shares inched down on the news this morning and are now trading more than 30% below their year-to-date high set in early March.
Why Is Fruergaard Stepping Down as Novo Nordisk CEO?
Novo Nordisk is opting for new leadership due to concerns that it’s losing its first-mover advantage in the fast-growing weight-loss drug market.
The news arrives only days after NVO said its flagship obesity treatment, Wegovy, came in shy of Street estimates for sales in Q1.
More importantly, the Danish company lowered its full-year guidance as well, citing increased competition particularly from compounded version of its weight-loss treatment in the U.S.
Meanwhile, rival Eli Lilly (LLY) continues to see relentless demand for its Zepbound. In the first quarter, its flagship weight-loss drug more than quadrupled sales to $2.31 billion – easily beating the $2.28 billion that experts had forecast.
Analysts Are Not Happy With Fruergaard’s Departure from NVO
Lars Fruergaard’s surprise departure from Novo Nordisk is not sitting particularly well with analysts.
Lukas Leu, a portfolio manager at Bellevue Asset Management, for example, said “he was leading the company for eight years and was, in my opinion, extremely successful.”
Under Fruergaard’s leadership, NVO shares rallied as much as 600%. At one point, Novo Nordisk became the most valuable company in all of Europe.
Experts are concerned about his departure also because the new chief executive could hinder the behemoth’s ability to respond quickly to rising competitive threats.
Is It Worth Buying Novo Nordisk Stock in 2025?
Investors should note, however, that Wall Street hasn’t thrown in the towel on Novo Nordisk stock.
In fact, the consensus “Moderate Buy” rating on NVO shares comes with a mean target of about $102 currently, which indicates potential upside of 60% from current levels.
Plus, a healthy 3.56% dividend yield makes Novo Nordisk all the more exciting to own for 2025.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.