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Novo Nordisk - a technical review📉

$NOVO B (+2,62 %) The chart shows the period from the strong price performance in March/April 2021. From this point onwards, the price was supported by strong momentum and closely followed the red line, which represents the second standard deviation of the VWAP (Volume Weighted Average Price). This second standard deviation ran quite parallel above the SMA50 until the trend reversed in July 2024.

The significant volume peaks were in the price ranges around € 51, € 70 and € 83. Numerous positions were built up between April and November 2022, particularly in the €51 range. The price is currently at the lower edge of the first standard deviation of the VWAPwhich lies exactly on one of these volume peaks. From a technical perspective, this could represent a strong support zone. The next few weeks, up to the earnings on 7 May, will show whether institutional investors defend their trades from this area.

A positive scenario would be a bounce up to the next volume peak around € 70 or even beyond to above the VWAP (blue line). A negative scenario on the other hand, could mean a fall in the share price to around € 40.

After the share price reached the lower edge of the first standard deviation of the VWAP yesterday, I increased my Novo position by a further 10%. Despite the current price losses, which are likely to affect many investors, the fundamental figures make me optimistic about the future.

Estimates for sales and EPS for the next few years are still rising
P/E ratio, KUV and KBV are at the same levels as in 2018
Gross margin is >80%, EBITDA margin >50%,
Cash flow from operating activities continues to rise.

Some have already pulled the ripcord and exited $NOVO B (+2,62 %) exited. My position is already quite large for my individual share positions with a total of 220 shares, so I may well adjust the position size again slightly in the event of a bounce. Let's see what happens after the earnings on May 7?

How do you see Novo? Have you already pulled the ripcord, or do you have strong nerves and are taking advantage of the current price weakness to expand a market leader in the diabetes sector?

@Sebi I would also like to see a picture including RSI and MACD - thanks for pointing this out - I'm sure many people will find it interesting!

23 Commentaires

Björn@Kapital_Koala

I got in too early, currently at ~-30%. But I will hold on and if it falls below €50 on a sustained basis I will top up again.
Don't expect prices of €120 in the future, but there is enough money for share buybacks and dividends, potential for future drugs and the price will recover again. ☺️

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Patrick@Pazi3

@Kapital_Koala Don't worry about it. I'm on -40% 😂

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TomTurboInvest@TomTurboInvest

@Kapital_Koala haha - I'm currently at -37% - you could also call it getting in too early - it's not always ideal 🙄
Everything that falls quickly can also rise again quickly - especially in the pharmaceutical sector. The company and the products are good - the fundamentals too - I can sit it out.

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Björn@Kapital_Koala

@TomTurboInvest I see it the same way. 🤙

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investment_guru_2035@investment_guru_2035

I bought a first tranche of 35 shares at around €51 - I don't think I'm doing anything wrong. The fundamentals are right, so depending on the scenario we will sit it out or buy more - or both.

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TomTurboInvest@TomTurboInvest

@investment_guru_2035 This entry-level price will be the envy of many!

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Chris@Multibagger

Well, I am not invested. Unlike many others here, I also consider the share to be fundamentally unsuitable for a long-term buy and hold strategy. The current key figures are appropriate for the price level, but the prospects in the weight market are very fragile due to the competition. And that is the main sales driver. But at 50,-- I find a quite interesting level for a trade speculation with a long KO. The KO just below 40 and SL at around 48. That's a pretty tempting opportunity I admit. The risk is around 25% and if the share rebounds to 60, such a ticket makes 100%.

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Dividendenopi👴@Dividendenopi

Thank you @TomTurboInvest for your summary. Regardless of the company valuation and the chart.... I recently wrote that I had discussed NOVO with my wife as a pharmacist and that she is skeptical, at least in the medium term. Yes, the "new" insulins are innovative and good in the long term. However, the withdrawal from the proven human insulin preparations - Sanofi is also doing this, by the way - such as Levemir and Actrapid is happening too quickly. Changing therapy is a real challenge for doctors - and not comparable to "just take ibuprofen if there is no paracetamol"... - and they hardly have the time (and sometimes no desire) to "convince" patients. And the patients have even less desire. Yes, GLP1 drugs are more lucrative and also enable improved therapies. See previous sentence for sticking point. There are (still) alternative products, but the trend is following the new preparations. Irrespective of this, the loss of trust naturally weighs heavily and Germany is not an insignificant market for NOVO. Especially as they continue to sell human insulins in other countries because there is more money there. But even there, use will decline because the form of administration will change from the usual pens to vials and thus syringes. As long as people are not really concerned with bread units, a balanced diet and a sense of responsibility towards their bodies, the market will continue to grow and so will NOVO. The momentum is against it, but there is still considerable potential in the medium term. If you can and want to hold out, buy for the long term. Put it in your portfolio and check back in 5 years.

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bull_investor_vkmhk@bull_investor_vkmhk

I am convinced, will remain invested and expand the position. However, it may take another 1-2 years for the returns to materialize. But I don't mind.

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Patrick@Pazi3

Thank you for your assessment.
Basically, I see the share price as favorable, even considering the strong competition. Unfortunately, my position is already at 7% of my portfolio value.... Under no circumstances do I want to go above 10%. If we see prices in the region of 40 or below, I will add to my position. (Provided there is no fundamental change)

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TomTurboInvest@TomTurboInvest

@Pazi3 well - 7% is a big figure! You have to pay attention to risk management, so that a misjudgement doesn't hit the portfolio too hard, no matter how tempting the prices are. My position is still smaller at 2%, which is still possible, but I would reduce my position again slightly in the event of a bounce.

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Silas W.@DynasticGrind

@TomTurboInvest I also have 3 positions with over 10% each - they simply "grew there". My first "big" investment (which is still a heavyweight today) was BP, at the time well over 50% of my portfolio, because I thought "oil is always needed and dividends would be cool"... If only it were always that easy.

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Heiko G.@Ozzel

Save 50 euros a month and firmly believe that it will go up steadily.

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Sebi@Seebi

I'll try a different approach.
What I'm missing here would be a contextual assessment of the overall market, e.g. healthcare sector, biotech sector, DAX or global macro situation.
Perhaps a mention of RSI, MACD or price action to better assess the current momentum situation. Also the question: How sustainable was the upward trend in 2021-2024? Was it driven more by fantasy or by fundamental developments?
Then we have all the negative influencing factors such as Eli Lilly's market dominance. Eli has shown greater efficacy with its drug Zepbound in clinical trials than Novo Nordisk's Wegovy. In addition, the prescription figures for Zepbound clearly exceed those for Wegovy.
Now add to this the disappointing trial data, the latest results for Novo Nordisk's next obesity drug, CagriSema, did not meet expectations, further weighing on market sentiment .
The stock has been in a long-term downtrend since September 20, 2024 and has lost around 55% of its value in this period. The share price performance on May 7 will be significantly influenced by current market dynamics and company news. If there is no new, positive impetus from the company, which is not to be expected at the moment, the downward trend is likely to continue. I would therefore clearly tend to sell and under no circumstances buy now

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TomTurboInvest@TomTurboInvest

@Seebi You can imagine the RSI after the sell-off, it is in the oversold area as recently to Corona. MACD far negative...

I am surprised that everyone and everything is only looking at the weight loss aspect, the cash cow is still the diabetes track - there are patients who "have to" take it and a lot of money is earned there. That's where Novo comes from and is the top dog. That seems to me to have slipped into the background in all the discussions about Novo 🤷‍♂️

PS: I'll add a picture with RSI and MACD as well

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Sebi@Seebi

@TomTurboInvest Understand your point but RSI & MACD are just technicals. They say little about the actual substance or future of the company.
As far as the diabetes business is concerned: sure, money is flowing in. But Novo is not without competition, and that is precisely why many people are also looking at the weight loss segment because that is where the potential for future growth lies.

The stock market not only evaluates the current situation, but also the prospects. And not everything is brilliant at the moment.
Current analyst expectations indicate that Novo Nordisk will not reach its estimates in the first quarter of 2025. In particular, sales figures for Wegovy and Ozempic could fall short of forecasts. Bank of America is forecasting a possible reduction in the sales forecast for the full year of around 2 % .
And let's be honest: if the figures come out on May 7 and the expected slump in profits occurs (which many analysts suspect), then the share will come under considerable pressure again.

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TomTurboInvest@TomTurboInvest

@Seebi I added the RSI and MACD because you correctly considered them helpful in your comment. My post is a "technical view" as described in the title and is not intended to replace fundamental analysis or include market views, there is certainly something in the feed, Novo is much discussed here😅

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Sebi@Seebi

@TomTurboInvest Thanks for the addition.
Technically actually ok, no question, but without taking into account the fundamental risks (e.g. possible sales warning competition. Disappointing study data. Regulatory risks such as price controls for insulin in the USA and, most recently, patent expiries), it's only half the story. Especially with a stock as hot as Novo, this can quickly turn around. Nevertheless, good article

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Kai@KaRamba

Getquin and his $NOVO B bubble 🤣 Nevertheless, I wish you all every success 😁😉

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Guido@Loki007

Hi everyone. I've been following the reports here on $NOVO Bfor a long time and it reminds me a lot of $22U Biontech. They also only had the corona vaccine and nothing else. When it was no longer in demand, the price went down and they are waiting for new innovations. I hope it turns out well. Incidentally, I'm waiting for the breakthrough with Biontech myself.

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TomTurboInvest@TomTurboInvest

@Loki007 I wouldn't compare Novo with $BNTX. Novo has been a leader in the diabetes sector for decades and is still the cash cow. This seems to get lost in the noise about weight loss injections/tablets. Diabetes will not disappear in the foreseeable future, on the contrary, the numbers are on the rise - thanks to our lifestyle habits 🥲

Netflix, for example, was the star of last week with a net margin of over 30%; such margins have been normal for Novo for years. It always depends on the "marketing noise" of the analysts an🤷🏽‍♂️

And if BionTech's promising trial results lead to approval, it will revolutionize oncology therapies. But there is always a residual risk with pharma - whether you get approval or not...

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financial_guru_2124@financial_guru_2124

@Loki007 I need to make a quick correction. Novo Nordisk is the global market leader in diabetes therapy.
I am a doctor and have been following the share for 30 years.

I bought it in 2016 and sold it in 2023. So I benefited from Wegovy and Ozempic rather by chance, but I've just got back in at €60 and have now added to my position at €51.

Even if Eli Lilly is currently ahead in the obesity market, Novo Nordisk will continue to grow at an above-average rate

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LoneMelone@TradingMelone

39Min

Vwap is at 280, POC at 160. would be careful such strong hype stocks tend to reverse the entire swing disproportionately after the hype reverses back to the starting position.

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