There has been a big achievement’ for the Danish pharmaceutical company as revenue growth rate reaches 20 year high.
Growth isn’t limited by demand, but by production capacity the market believes upside surprises could be afoot in 2024 despite revenue guidance mid-point being slightly below consensus estimate.
Peter Garnry, analyst at Saxo, said, “Novo Nordisk smashed all records in Q4 2023 beating estimates for FY2023 revenue and earnings before interest and taxes.
“The revenue growth rate in Q4 2023 was 37% year-over-year the highest recorded growth rate since 2003.
“This is a big achievement since the company has grown considerably in size over the past 20 years. It highlights the insatiable demand for weight loss drugs and that the growth is not demand constrained but production capacity constrained.
“This is also seen in the revenue mix with the obesity care segment seeing declining revenue quarter-over-quarter in Q4.
“The sales mix has shifted from Wegovy, the FDA approved weight loss drug, to Ozempic which is FDA approved for treating type 2 diabetes but contains the same active ingredient, semaglutide, which is a GLP-1 receptor, which causes weight loss.
“The revenue guidance for FY2024 is 18-26% which means that the mid-point is a bit below consensus estimate of 23.3%, but given the shares are almost 2% higher it indicates that the market believes that upside surprises could occur this year.
“The CEO’s comment that growth can be sustained despite competition is a strong forward-looking statement by Novo Nordisk that cements its position as the most valuable company in Europe.”