December 14, 2023
Top 10 Stock Novo Nordisk Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Novo Nordisk – Top 10 Stock in SDG 13: Climate Action
Novo Nordisk is listed as a top 10 stock on December 14, 2023 in the market index SDG 13 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 26 (26% performer), Obermatt assesses an overall hold recommendation for Novo Nordisk on December 14, 2023.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Novo Nordisk Hold
| 360 METRICS | December 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 9 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 46 |
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| SENTIMENT | ||||||||
| SENTIMENT | 18 |
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| 360° VIEW | ||||||||
| 360° VIEW | 26 |
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ANALYSIS: With an Obermatt 360° View of 26 (better than 26% compared with alternatives), overall professional sentiment and financial characteristics for the stock Novo Nordisk are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Novo Nordisk. The consolidated Growth Rank has a good rank of 99, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. It ranks higher than 99% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 9 means that the share price of Novo Nordisk is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 91% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 46, which means that the company has a riskier financing structure than 54% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 18, indicating professional investors are more pessimistic about the stock than for 82% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 26, Novo Nordisk is worse than 74% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 99), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 18), the company is rather risky when it comes to financing (Safety Rank of 46). The negative market view on Novo Nordisk may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Novo Nordisk compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Novo Nordisk negative
ANALYSIS: With an Obermatt Sentiment Rank of 18 (better than 18% compared with alternatives), overall professional sentiment and engagement for the stock Novo Nordisk is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Novo Nordisk. Analyst Opinions are at a rank of 30 (worse than 70% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 37, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 15, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 85% of competitors). On the upside, the Professional Investors rank is 74, which means that professional investors hold more stock in this company than in 74% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 18 (less encouraging than 82% compared with investment alternatives), Novo Nordisk has a reputation among professional investors that is far below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Novo Nordisk stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Novo Nordisk Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 9 (worse than 91% compared with alternatives), Novo Nordisk shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Novo Nordisk. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 61% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 7 which means that the stock price compared with what market professionals expect for future profits is higher than 93% of comparable companies, indicating a low value concerning Novo Nordisk's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 11 which means that the stock price compared with what market professionals expect for future profit levels is higher than 89% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 1 is also low. Compared with invested capital, the stock price is higher than for 99% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 9, is a sell recommendation based on Novo Nordisk's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Novo Nordisk? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Novo Nordisk only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Novo Nordisk Growth Momentum high
| GROWTH METRICS | December 14, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 79 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 84 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 89 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 94 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 99 |
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ANALYSIS: With an Obermatt Growth Rank of 99 (better than 99% compared with alternatives) for 2023, Novo Nordisk shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Novo Nordisk. Sales Growth has a value of 79, which means that, currently, professionals expect the company to grow more than 79% of its competitors. The same is valid for Profit Growth with a value of 84 and for Capital Growth with 89. In addition, Stock Returns had an above-average rank value of 94, which means they have been higher than 94% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 99, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Novo Nordisk exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Novo Nordisk Debt Financing Safety below-average
| SAFETY METRICS | December 14, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 54 |
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| REFINANCING | ||||||||
| REFINANCING | 11 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 85 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 46 |
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ANALYSIS: With an Obermatt Safety Rank of 46 (better than 46% compared with alternatives), the company Novo Nordisk has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Novo Nordisk is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Novo Nordisk. Leverage is at a rank of 54, meaning the company has a below-average debt-to-equity ratio. It has less debt than 54% of its competitors. Liquidity is also good at a rank of 85, meaning the company generates more profit to service its debt than 85% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 11, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 89% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 46 (worse than 54% compared with alternatives), Novo Nordisk has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Novo Nordisk. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Novo Nordisk Below-Average Financial Performance
| COMBINED PERFORMANCE | December 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 9 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 85 |
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| COMBINED | ||||||||
| COMBINED | 48 |
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ANALYSIS: With an Obermatt Combined Rank of 48 (worse than 52% compared with investment alternatives), Novo Nordisk (Pharmaceuticals, Denmark) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Novo Nordisk are low in value (priced high) with a consolidated Value Rank of 9 (worse than 91% of alternatives), and are riskily financed (Safety Rank of 46, which means above-average debt burdens) but show above-average growth (Growth Rank of 99). ...read more
RECOMMENDATION: A Combined Rank of 48, is a hold recommendation based on Novo Nordisk's financial characteristics. As the company Novo Nordisk shows low value with an Obermatt Value Rank of 9 (91% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 99% of comparable companies (Obermatt Growth Rank is 99). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 46 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Novo Nordisk, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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