Is Novo Nordisk Attractively Priced After 23% Slide Amid Industry Competition in 2025?

Wondering if Novo Nordisk shares are a bargain or overpriced? You are not alone, especially with so much buzz around healthcare leaders these days. After surging for several years, Novo Nordisk stock has taken a sharp turn, dropping 7.8% over the last week and sliding 22.7% in the past month. This hints at shifting market sentiment. Some of this volatility can be traced to major headlines around the pharmaceutical industry, including growing competition for diabetes and obesity drugs, as well as evolving regulatory discussions across Europe and the US, which have rattled investor nerves. The company's current valuation score stands at 5 out of 6 undervalued checks. While we will break down what that really means using several major valuation approaches, stick around to see an even more holistic perspective at the end of the article.

Find out why Novo Nordisk's -59.8% return over the last year is lagging behind its peers.

Approach 1: Novo Nordisk Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by projecting its future cash flows and discounting them back to today's value. This approach offers a detailed view of what the business could be worth based on its potential to generate cash over time.

Novo Nordisk's current Free Cash Flow stands at DKK 67.6 Billion. According to analyst forecasts and model extrapolation, this figure is expected to grow significantly over the coming years, reaching a projected Free Cash Flow of DKK 210 Billion by 2035. Estimates are provided by analysts for the next five years, and projections beyond that are based on trends identified by Simply Wall St.

The DCF fair value for Novo Nordisk is calculated at DKK 1,120.60 per share. This reflects a substantial implied discount of 74.0% compared to the current share price. This suggests the stock appears deeply undervalued based on these future cash flow projections.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Novo Nordisk is undervalued by 74.0%. Track this in your watchlist or portfolio, or discover 876 more undervalued stocks based on cash flows.NOVO B Discounted Cash Flow as at Nov 2025

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Novo Nordisk.

Approach 2: Novo Nordisk Price vs Earnings

The Price-to-Earnings (PE) ratio is a leading valuation tool for profitable companies, like Novo Nordisk, because it directly connects a company's share price to its earnings. For investors, it is an accessible way to gauge whether a stock is priced attractively relative to its earnings power.

Story Continues

Typically, companies with stronger growth potential and lower risk earn higher PE ratios, while slower-growing or riskier firms justify a lower number. The appropriate PE ratio depends on how quickly earnings are expected to rise, alongside market confidence and recent business performance.

Novo Nordisk currently trades at a PE ratio of 12.47x. To put this into perspective, the average PE among its pharmaceutical peers is 21.39x, while the industry-wide average sits even higher at 23.38x. At first glance, Novo Nordisk appears significantly cheaper than both peers and the broad sector.

However, Simply Wall St’s Fair Ratio for Novo Nordisk is 29.15x. This proprietary metric blends factors like earnings growth, profit margins, industry trends, company size and projected risks for a more tailored benchmark. Unlike generic peer or industry comparisons, the Fair Ratio is designed to capture what is genuinely fair for Novo Nordisk's specific situation.

With Novo Nordisk's PE ratio well below its Fair Ratio, the stock appears to be undervalued using this key measure.

Result: UNDERVALUEDCPSE:NOVO B PE Ratio as at Nov 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1404 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Novo Nordisk Narrative

Earlier we mentioned that there's an even better way to understand valuation. Let's introduce you to Narratives. A Narrative is a simple yet powerful approach where investors connect their view of a company's story, including its future prospects, risks, and strategy, to a personal financial forecast with assumptions for fair value, revenue, earnings, and margins.

Rather than relying solely on numbers or analyst targets, Narratives help you consider the wider context: what the business is doing, how the market could change, and what that means for the company’s future. This approach links your perspective on Novo Nordisk directly to a tailored financial forecast, making it easier to translate your views into a clear fair value estimate.

Narratives are easy to create and compare on the Simply Wall St Community page, where millions of other investors share their perspectives and updated valuations. By comparing your Narrative’s fair value to the current share price, you can quickly see whether you think Novo Nordisk represents a buy, hold, or sell opportunity, and Narratives automatically update when new information becomes available.

For example, some investors are forecasting a fair value as high as DKK 1,036 per share for Novo Nordisk, while others see a fair value closer to DKK 439. This illustrates how different assumptions and stories can lead to different investment decisions. Narratives put you in control, giving you confidence in every investment choice you make.

Do you think there's more to the story for Novo Nordisk? Head over to our Community to see what others are saying!CPSE:NOVO B Community Fair Values as at Nov 2025

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NOVO-B.CO.

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