Goldman Sachs: Novo Nordisk's pricing pressure is overly priced by the market; oral Wegovy will be key to reversing confidence

After releasing disappointing fiscal year 2026 guidance, Novo Nordisk’s stock price plummeted by as much as 18%, approaching a five-year low. Goldman Sachs believes the market’s reaction was excessive, and the current stock price has already fully priced in the company’s guidance at the lower end of the range (i.e., the most pessimistic scenario).

According to a previous article by Wall Street Insights, the core of market panic lies in a revenue forecast far below expectations—calculated at fixed exchange rates, the company expects revenue to decline by 5% to 13% in 2026. This data suggests that the U.S. obesity drug market is facing more severe pricing pressures and sales bottlenecks than anticipated.

On February 6, according to ChaseTrade, in response to the market’s sharp reaction, Goldman Sachs analyst James Quigley stated in a recent report that the market’s current pricing seems to have fully incorporated the guidance at the lower end of the range, meaning pessimism has been overly released.

Although Goldman Sachs lowered Novo Nordisk’s target price from DKK 436 to DKK 400, it maintained a “Buy” rating. The analyst believes that investors are underestimating the sales growth potential brought by the expansion of Medicare in the U.S. and the revenue potential after the launch of oral Wegovy.

However, Goldman Sachs also admits that the tone of the earnings call was unusually cautious, especially regarding the pricing resistance in the U.S. market—expecting mid-double-digit pricing headwinds in 2026. This forced Goldman to significantly adjust its model, not only lowering revenue and operating profit forecasts for 2026 but also substantially reducing assumptions about sales growth of injectable Wegovy in the U.S. market.

Market panic is excessive: stock price already implies the most pessimistic expectations

Research indicates that Novo Nordisk’s stock fell by 18% intraday, a sharp fluctuation that suggests the market has regarded the company’s guidance at the lower end of 2026 as the most likely scenario. The company’s guidance for fiscal year 2026 is a decline of 5% to 13% in revenue at fixed exchange rates (CER).

Goldman Sachs points out that the lower end of the guidance implies about a 13% and 14% downside risk to revenue and EBIT (earnings before interest and taxes), respectively, which aligns with the stock price decline.

Meanwhile, according to the report, the guidance issued by Novo Nordisk has surprised the market, with the core disagreement centered on sales expectations.

The company expects revenue to decline by 5% to 13% in 2026 at fixed exchange rates, mainly due to pricing pressures in the U.S. market, slowing sales growth, and the impact of generics. This contrasts sharply with competitor Eli Lilly, which provided a more optimistic sales outlook for 2026, only anticipating low to mid-double-digit pricing resistance.

As a result, Goldman Sachs has significantly lowered its expectations for the U.S. Wegovy business. Previously, the firm’s channel analysis forecasted a 20-25% sales increase in 2026 over 2025, but this has now been revised to about 5%. In terms of sales, Goldman expects sales of injectable Wegovy in the U.S. to decline by approximately 25% in 2026.

This pessimistic outlook mainly stems from two factors: first, the negative impact of the “Most Favored Nation” (MFN) clause leading to low single-digit revenue reductions; second, the price discounts required to obtain Medicaid coverage.

Goldman Sachs states that although management mentioned that sales releases from Medicare would gradually emerge from mid-2026 and bring substantial improvements in 2027, the current pricing headwinds have apparently caused the market to temporarily overlook this long-term benefit.

Oral Wegovy: The “booster” for the self-pay market

According to the report, amid a cloud of pessimism, Goldman Sachs sees the early performance of oral Wegovy as one of the few bright spots.

As of the week ending January 23, approximately 50,000 prescriptions for oral Wegovy had been issued in the U.S., with about 170,000 patients currently using the drug.

Notably, about 45,000 of these prescriptions are self-pay, indicating strong rigid demand.

Novo Nordisk management shows strong confidence in the supply and competitive position of this product. Regarding the planned launch of the competitor Orforglipron in Q2 2026, Novo Nordisk believes weight loss efficacy is a key factor influencing patient choice.

Data shows that oral Wegovy can achieve a 16.6% weight loss at week 64, outperforming the 12.4% at week 72 for 36mg Orforglipron.

Goldman Sachs states that although management confirmed that the gross margin of the oral version is lower than that of the injectable, its strategic importance lies in expanding patient coverage. Currently, insurance coverage has increased from one provider at launch to four, though the price elasticity and seasonality in the self-pay channel remain uncertain. Nonetheless, this is undoubtedly a key lever for Novo Nordisk to stabilize the stock price in the first half of 2026.

Key catalysts: pipeline updates and regulatory milestones

In addition to existing commercialized products, 2026 is also a critical validation period for Novo Nordisk’s pipeline.

• First is high-dose semaglutide, with FDA expected to make a regulatory decision in Q1 2026.

Goldman Sachs states that Novo Nordisk has sufficient capacity reserves, and once approved, it can quickly launch in the U.S.

• Second is the highly anticipated combination drug CagriSema. Regulatory decisions on this drug for obesity indications are expected by the end of 2026.

Goldman Sachs believes that for the REDEFINE 4 trial data expected in Q1, management has preemptively managed expectations, noting that this trial may not fully demonstrate CagriSema’s weight loss potential. The true potential will only be revealed after the 2027 REDEFINE 11 trial results (which will include a longer flexible dose adjustment period).

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