Ozempic-maker Novo Nordisk (NYSE:NVO) announced robust first-quarter results and hiked its financial outlook. However, shares of the Danish pharmaceutical major have come under pressure in the early trading session today as it faces supply constraints.
NVO’s Strong Q1 Numbers
During the quarter, NVO’s total sales increased by 24% year-over-year to DKK 65.35 billion, and operating profit improved by 30% to DKK 31.8 billion. The company’s EPS jumped by 29% to DKK 5.68 from a year ago.
This growth was driven by a 25% rise in the company’s Diabetes and Obesity care products. Its North America sales jumped by 35%, and International sales rose by 11% in Q1. Notably, Ozempic continued to perform well, with a 43% year-over-year increase in sales. Similarly, sales of Wegovy surged by a massive 107%.
Furthermore, the company’s operating margin improved by about 180 basis points to 48.7%. At the same time, Novo Nordisk noted that robust demand is resulting in periodic supply constraints and associated drug shortages for several of its products. To address this, the company is heavily investing (DKK 8.5 billion in Q1) to expand its capacity for active pharmaceutical ingredients (APIs) and fill-finish. Fill-finish refers to the process of filling vials or other containers with a finished pharmaceutical product and ensuring its final packaging. In February, it announced the acquisition of three fill-finish sites.
NVO’s Hiked Financial Outlook
Despite its supply challenges, Novo has hiked its financial outlook for the full year. It now expects sales growth of 19%-27% in FY2024 versus the prior outlook of an 18%-26% growth. Operating profit for the year is seen rising by 22%-30%, up from the previous 21%-29% estimate.
What Is the Price Prediction for NVO Stock?
The robust demand for its diabetes and weight loss products has pushed NVO shares nearly 56% higher over the past year. Overall, the Street has a Moderate Buy consensus rating on the stock, alongside an average NVO price target of $127.93. However, analysts’ views on the company could see revisions following today’s earnings report.
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