Is Novo Nordisk poised for a comeback in 2026? Despite recent struggles, this healthcare giant might be a hidden gem for savvy investors. Let's dive in!
Healthcare stocks haven't exactly been the darlings of the market lately. While the broader market, as measured by the S&P 500, has seen impressive gains of 84% over the past five years, the Health Care Select Sector SPDR ETF has only managed a 36% increase. This underperformance suggests that many healthcare stocks, including Novo Nordisk, could be significantly undervalued heading into 2026. As investors become wary of high valuations in tech and the overall stock market, they might seek refuge in the more modestly priced healthcare sector, which offers considerable upside potential.
One company that has caught my eye is Novo Nordisk. But why has this healthcare giant stumbled recently?
It's been a tough year for Novo Nordisk, to put it mildly. Even though healthcare stocks have generally performed well, and the Health Care Select exchange-traded fund is up 12% in 2025, Novo Nordisk shares have plummeted by 44%. This is an unusually poor performance for a leading healthcare company. The company hasn't been delivering the growth that investors expected. One of the main challenges has been combating compounding pharmacies that sell copies of its popular GLP-1 drugs, like Ozempic, a popular treatment for diabetes that also aids in weight loss.
This situation has led to reduced sales and a downward revision of the company's growth guidance for the year. The projected growth is now between 8% and 14% for the full year, a decrease from the previous forecast of 13% to 21%. Wegovy, its top weight loss drug, is expected to grow by only 14% this year, down from an earlier forecast of 21%.
Adding to these challenges, Novo Nordisk has also seen a change in its CEO position, with Maziar Mike Doustdar taking over from Lars Fruergaard Jørgensen. A change in leadership can often rattle a stock. With all these factors converging, it's been a perfect storm that has sent Novo Nordisk's stock into a tailspin.
A Beaten-Down Valuation: Opportunity Knocks?
Shares of Novo Nordisk are currently trading near their four-year lows. Buying the stock today would be like buying it after the company obtained approval for Wegovy in June 2021, when the stock was trading around $42. The stock's price-to-earnings multiple (P/E) is currently at a low 14, well below its 10-year average.
Why a Rally Might Be on the Horizon in 2026
When there's a wave of negative news, it can lead to an overreaction, which is what I believe has happened with Novo Nordisk's stock this past year. The company is taking legal action against compounding pharmacies to stop them from selling copies of its drugs, which could boost sales growth next year. Plus, Novo Nordisk is developing an oral weight-loss pill, which has shown promise in late-stage trials. Any catalyst that sparks investor interest in the stock next year could create a snowball effect, given its current low valuation.
I believe Novo Nordisk is positioned for a significant rally next year. For long-term investors, this growth stock appears to be a smart buy at its current levels.
What do you think? Do you agree that Novo Nordisk is a buy, or are there other factors to consider? Share your thoughts in the comments below!
