Goldman Sachs: Novo Nordisk's pricing pressure is overvalued by the market, and oral Wegovy will be key to restoring confidence

After releasing disappointing guidance for the fiscal year 2026, Novo Nordisk's stock price plummeted by 18%, nearing a five-year low. Goldman Sachs believes that the market reaction is excessive, and the current stock price has actually fully accounted for the lower limit of the company's fiscal year 2026 guidance (i.e., the most pessimistic scenario).

According to a previous article mentioned by Wallstreetcn, the core of the market panic lies in a revenue guidance that is far below expectations—at constant exchange rates, the company expects revenue to decline by 5% to 13% in 2026, indicating that the U.S. obesity drug market is facing more severe pricing pressures and sales bottlenecks than anticipated.

On February 6, according to news from the Wind Trading Desk, in response to the market's violent reaction, Goldman Sachs analyst James Quigley pointed out in a recent research report that the current market pricing seems to have fully incorporated the lower limit of the guidance range, indicating that pessimism has been excessively released.

Although Goldman Sachs lowered its target price for Novo Nordisk from 436 Danish kroner by 8% to 400 Danish kroner, it still maintains a "buy" rating. Analysts believe that investors have underestimated the sales growth potential brought by the loosening of U.S. Medicare and the revenue potential following the launch of the oral version of Wegovy.

However, Goldman Sachs also acknowledged that the tone conveyed during the earnings call was unusually cautious, especially regarding the description of pricing resistance in the U.S. market—expecting mid-double-digit pricing headwinds in 2026. This forced Goldman Sachs to significantly adjust its model, not only lowering its revenue and operating profit expectations for 2026 but also critically reducing its assumptions for sales growth of the injectable version of Wegovy in the U.S. market.

Market Panic Excessive: Stock Price Implies Most Pessimistic Expectations

Research indicates that Novo Nordisk's stock price fell by 18% during trading, and this sharp fluctuation suggests that the market views the lower limit of the company's 2026 guidance as the most likely scenario. The revenue guidance provided by the company for the fiscal year 2026 indicates a decline of 5% to 13% at constant exchange rates (CER).

Goldman Sachs pointed out that the lower limit of the guidance implies approximately 13% and 14% downside risks to revenue and EBIT (earnings before interest and taxes) compared to previous market consensus, which aligns closely with the stock price decline.

At the same time, according to the research report, the guidance provided by Novo Nordisk has taken the market by surprise, with the core disagreement lying in the expectations for sales.

The company expects revenue to decline by 5% to 13% at constant exchange rates in 2026, primarily due to pricing pressures in the U.S. market, slowing sales growth, and the impact of generic drugs. This stands in stark contrast to its competitor Eli Lilly, which has provided guidance for 2026 that suggests a more optimistic sales outlook, estimating only low to mid-double-digit pricing resistance As a result, Goldman Sachs has significantly lowered its expectations for the U.S. Wegovy business. Previously, the institution predicted a 20-25% increase in sales in 2026 compared to 2025 through channel analysis, but this figure has now been revised to only about a 5% increase. In terms of sales, Goldman Sachs expects that the sales of the injectable Wegovy in the U.S. will decline by about 25% in 2026.

This pessimistic outlook mainly stems from two aspects: first, the negative impact of the "Most Favored Nation" (MFN) clause leading to low single-digit revenue; second, the price discounts that must be accepted to obtain Medicaid coverage.

Goldman Sachs stated that although management mentioned that the sales release from Medicare would gradually become apparent starting in mid-2026 and bring substantial improvements in 2027, in the face of current pricing headwinds, this long-term positive outlook is clearly being temporarily overlooked by the market.

Oral Wegovy: A "Stimulant" for the Self-Pay Market

According to research reports, amidst a sea of bearish sentiment, Goldman Sachs believes that the early performance of oral Wegovy has become one of the few bright spots.

As of the week ending January 23, approximately 50,000 prescriptions for oral Wegovy have been issued in the U.S. market, with about 170,000 patients currently using the drug.

Notably, of these 50,000 prescriptions, about 45,000 are self-pay, indicating strong rigid demand.

Novo Nordisk's management has expressed strong confidence in the supply and competitive position of this product. Regarding the competing product Orforglipron, which is planned to be launched in the second quarter of 2026, Novo Nordisk believes that the degree of weight loss is a key indicator for patients when choosing a medication.

Data shows that oral Wegovy can achieve a weight loss effect of 16.6% by week 64, outperforming the 12.4% performance of the 36mg dose of Orforglipron by week 72.

Goldman Sachs stated that although management confirmed that the gross margin of the oral product is lower than that of the injectable version, its strategic significance lies in expanding patient coverage. Currently, the insurance coverage has increased from one supplier at the time of launch to four, and although there are still uncertainties regarding the price elasticity and seasonal characteristics of the self-pay channel, this is undoubtedly a key lever for Novo Nordisk to stabilize its stock price in the first half of 2026.

Key Catalysts: Pipeline Readouts and Regulatory Milestones

In addition to existing commercialized products, 2026 is also a critical validation period for Novo Nordisk's pipeline.

• First, the high-dose semaglutide is expected to receive a regulatory decision from the FDA in the first quarter of 2026.

Goldman Sachs stated that Novo Nordisk has sufficient production capacity in reserve and can quickly launch in the U.S. once approved.

• Second, the highly anticipated combination formulation CagriSema. The regulatory decision regarding this drug for obesity indications is expected to be announced by the end of 2026.

Goldman Sachs believes that management has conducted pre-emptive management of expectations for the REDEFINE 4 trial data, which is about to be read out in the first quarter, indicating that this trial may not fully reflect CagriSema's weight loss potential, and the true potential release will need to wait for the results of the REDEFINE 11 trial read out in 2027 (which uses a longer flexible dose adjustment period)