NVO Extremely Undervalued Trade Opportunity

about 1 month ago

"After looking at NVO again, I think there will still be some challenges in the short term due to their deal with the US government which is going to lower their margins, but I believe the volume growth that could come out of it after 2026 could potentially more than offset the temporary margin compression. They're going to get a deal on the tariffs for the next three years. No tariffs. That's going to be huge for them. So I believe NVO at 12 times earnings relative to all those risks is more than fairly valued. It's even extremely undervalued in my opinion and the dividend is well covered for now and I believe the company has not been buying back stock in 2025, so they should start buying back stock again in 2026 and that could be a catalyst for the stock to potentially bottom out or start holding up a little bit better."

The speaker argues that despite short-term margin compression from a government pricing deal, Novo Nordisk (NVO) is extremely undervalued at 12 times earnings. He believes that post-2026, volume growth, tariff exemptions, and eventual share buybacks could offset these pressures, making NVO an attractive trade opportunity.

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