By Novo Nordisk, the leading pharmaceutical company, is scheduled to release its fourth-quarter results on Wednesday. Analysts predict impressive growth numbers for the company. Here are the key details you should know:
Net Profit Forecast
According to a FactSet poll of 12 analysts, net profit in the quarter is expected to increase by a remarkable 52% to 20.64 billion Danish kroner ($3 billion).
Sales Forecast
A FactSet poll of 14 analysts predicts that fourth-quarter sales will rise from DKK48.09 billion to DKK62.62 billion compared to the previous year.
Soaring Demand and Stock Performance
Novo Nordisk’s shares have witnessed a significant increase of 61% this year, currently trading at around DKK754. The surge in demand for their obesity treatments has exceeded supply capacity, resulting in such remarkable stock performance.
Focusing on GLP-1 Drugs
Soren Lontoft Hansen, a senior analyst at Sydbank, expects Novo Nordisk’s GLP-1 drugs, designed for treating type 2 diabetes and obesity, to be the primary driver of the company’s growth in the quarter. Hansen predicts an overall sales growth of 40% for GLP-1 diabetes treatments, amounting to DKK34.11 billion. The exceptional growth can be attributed to the popularity of the diabetes drug Ozempic, which is also being used off-label to treat obesity. Hansen expects sales of Ozempic to rise by 56% compared to the previous year.
Mixed Growth Expectations
While high demand for the obesity drug Wegovy is anticipated to persist, Novo Nordisk’s decision to limit the supply of low doses in the U.S. due to production capacity constraints is expected to moderate quarterly growth. Hansen forecasts Wegovy sales of DKK9.66 billion.
Novo Nordisk’s fourth-quarter results are anxiously awaited as the company continues to dominate in the pharmaceutical industry.
Novo Nordisk’s Strong Growth and Forecast for 2024
Sydbank predicts that Novo Nordisk’s gross margin will enjoy a boost from increased sales and favorable product-mix effects. However, the lower net prices in the U.S. and currency fluctuations pose a counter effect. Despite the rise in capacity costs due to increased activity, Novo Nordisk is expected to benefit from strong operational leverage. Thus, the impact of increased capacity costs will be mitigated by the growth in overall sales.
Outlook for 2024: Focus on Guidance
The upcoming report will primarily focus on the guidance for 2024. Sydbank remains optimistic about the sustained demand for Novo Nordisk’s GLP-1 drugs, particularly Ozempic and Wegovy. The bank believes that Novo Nordisk will successfully sell all the GLP-1 drugs it produces. Accordingly, the forecast for the full-year will heavily depend on production capacity and the inclusion of new contract manufacturers in 2024. Sydbank expects a solid revenue and earnings growth forecast of 16%-22% in local currency.
Surpassing Expectations
Sydbank notes that Novo Nordisk exceeded production expectations in 2023, which leads them to believe that the same trend may continue in 2024, possibly resulting in more positive earnings surprises.
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