The platform is not burning

Equity markets — or “Mr. Market”, as value investors like to call it — feel distinctly bi-polar at the moment. We are seeing outsized moves on headlines, narrative shifts, or even small changes in guidance. Yesterday we mentioned how advertising groups such as Publicis are being punished on the “AI will make them irrelevant” story. We see something similar in software: SAP has been under pressure despite solid results, largely on AI-related fears.

Novo Nordisk is the latest and most extreme example. The stock fell 17.2% after results. The company’s 2026 outlook was indeed below expectations (up to 10% lower organic sales growth versus consensus). And yes: 2026 looks like a transition year. Pricing pressure is real (partly driven by the new US policy stance), competition from Eli Lilly has intensified, and Novo is clearly fighting to defend market share.

But stepping back, our conclusion is closer to what one broker summarized well: the platform is not burning.

Novo has taken tangible steps to protect its moat: it is progressing with the launch of an oral version in its obesity franchise, it has refreshed key governance and management roles, it remains highly profitable, it has announced a sizeable share buyback, and — most importantly — it still has a meaningful pipeline beyond the current cycle. In other words, this is not a company in distress; it is a company navigating a tough year.

For us, a lot of the bad news now looks more than reflected in the price. It will take time to recover but the investment case is not broken for us as long term investors. We therefore maintain the position in our European Value Fund.