Why Novo Nordisk Stock Crumbled Again Today

Key Points

• An analyst downgraded the stock.

• He now feels it is only a hold as opposed to a buy.

• 10 stocks we like better than Novo Nordisk ›

The hits just kept coming for beleaguered Ozempic and Wegovy maker Novo Nordisk (NYSE: NVO) on Thursday. The company, which has been slammed with investor sell-offs since cutting its guidance on Tuesday, fell by almost 6% as yet another analyst weighed in with a bearish take on its prospects. The S&P 500 index, meanwhile, traded down only slightly.

A downgrade to hold

That pundit was HSBC's Rajesh Kumar, who downgraded his recommendation on Novo Nordisk that morning.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

Kumar now believes the stock is only worthy of a hold recommendation, down from his previous assessment of buy. He also significantly lowered his price target, chopping it to 360 Danish krone ($55.49) per share from the preceding 680 krone ($104.81).

According to reports, Kumar particularly expressed concern about compounded weight-loss drugs, a form of competition that has affected Novo Nordisk's otherwise lively Ozempic and Wegovy sales. The analyst wrote that although the U.S. Food and Drug Administration (FDA) has banned compounding, rivals continue to sell such drugs illegally.

Kumar does not believe this situation will change much in the near future, so he believes current estimates for total GLP-1 drug sales might be overestimated.

Reasons to be cheerful

The HSBC pundit certainly raises valid concerns and questions, although the ultimate effect of the compounding ban on Novo Nordisk will depend on how effectively it's enforced; perhaps, in contrast to Kumar's view, the offending parties will be caught and punished.

I wouldn't be as down on the Danish company as the analyst. That hot competition only proves how popular Wegovy and its ilk are at the moment, and in a vast country like the U.S. that has a clear problem with obesity, that should continue to motor its fundamentals higher.

Should you invest $1,000 in Novo Nordisk right now?

Before you buy stock in Novo Nordisk, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Novo Nordisk wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $638,629!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,098,838!*

Now, it’s worth noting Stock Advisor’s total average return is 1,049% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2025

HSBC Holdings is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends HSBC Holdings and Novo Nordisk. The Motley Fool has a disclosure policy.