Episode summary
Novo Falls by Record After Wegovy Maker Slashes Forecast, Names New CEO | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Isabelle Lee · Guests: Michael Shah, Lee Klaskow, George Ferguson
Summary
Novo Nordisk’s shares were hammered after the company cut its full-year guidance for the second time this year and named internal veteran Maziar Mike Doustdar as CEO. The analyst said the lowered outlook reflects continued pressure from compounded GLP-1 competition in the U.S., slower Wegovy growth, and uncertainty about the 2025-to-2026 trajectory. He argued the market may be right to worry about long-term growth, but said Novo still has a large obesity and diabetes opportunity and enough operating leverage to protect margins.
Union Pacific’s $72 billion cash-and-stock deal for Norfolk Southern was presented as a strategically compelling but heavily regulated merger. The analyst said the transaction could create the first U.S. transcontinental railroad and generate $2.75 billion of synergies, mostly from revenue gains and cost savings, though approval could take until early 2027. He said the deal could trigger more railroad consolidation if regulators allow it.
Boeing showed signs of a cash-flow turnaround, while JetBlue posted a smaller-than-expected loss. The analyst said Boeing’s positive cash from operations and lower free cash burn suggest its recovery is intact, though 737 certification delays remain. For airlines, he said excess domestic capacity is still the core problem and warned weaker quarters later this year could force carriers to cut seats and raise fares.
Key takeaways
- Novo Nordisk cut its 2025 sales growth forecast to 7% and operating profit growth to 6% after currency, down from 14% and 15%, as U.S. Wegovy pressure persisted.
- The analyst said Novo’s new CEO, Maziar Mike Doustdar, is an internal hire who must improve execution and defend share against Eli Lilly.
- Union Pacific and Norfolk Southern said the merger could create $2.75 billion in synergies, with about $1.75 billion coming from revenue and $1 billion from cost savings.
- The railroad deal faces a long regulatory path, with closure not expected until early 2027 at the earliest.
- Boeing generated positive cash from operations and only about $200 million of free cash flow burn, which the analyst called an inflection point in the turnaround.
- JetBlue’s smaller loss did not change the analyst’s view that too much U.S. airline capacity is pressuring fares and profitability.
Notable quotes
“reported guidance now is calling for 7% sales growth, 6% operating pro profit growth after adjusting for currency”
“there's concerns about you know mid to long-term growth given how concentrated um or how reliant sorry Novo is um on WGOI for growth”
“This deal is not going to close uh if it does close uh until uh early 2027”
“they laid out uh 2.75 billion in synergies. About 1.75 of that 2.75 is going to be from revenue”
“we're seeing an inflection point here in cash flow so cash flow had been negative for the last I think it was six quarters before this”
How the episode opens
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His friends call him Mikey and I'm his friend. I'm calling him Mikey. Mikey Shaw. Michael Shaw, senior pharma biotech analyst at Bloomberg Intelligence. He's based in London. Mike, you got to talk to me about what's going on with Novo Nordex. I thought these obesity drugs were the bomb here. What's going on with their guidance? That was a huge miss for them.
Yeah, two pieces of news today. Um, first is the guidance cut. So, second guidance cut of the year.
Um, so reported guidance now is calling for 7% sales growth, 6% operating pro profit growth after adjusting for currency. And that compares to um 14 and 15% respectively um previously. Now a lot of that is related to the US market um there.
They're still seeing headwinds from compound and GP1 which seems to be the main driver that's affecting WGOI growth and there's a lack of visibility here. So all of that creates uncertainty for investors and also kind of questions around not only 2025 numbers but the exit rate into 26. So there's concerns about you know mid to long-term growth given how concentrated um or how reliant sorry Novo is um on WGOI for growth.
Um the other headwind is competition to um Ampic. So that's the GLP1 for diabetes and that's another you know key growth driver um for the for the company. Um second piece of news um new CEO appointment.
Um so they went with an internal candidate. Um I think the market was perhaps expecting um them to go for an external candidate.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- wegovy forecast cut
- novo nordisk ceo change
- rail merger
- boeing cash burn
- jetblue turnaround
Companies and tickers mentioned
- NVO
- UNP
- NSC
- BA
- JBLU
- Novo Nordisk
- Union Pacific
- Norfolk Southern
- Boeing
- JetBlue Airways
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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