$NVO offers solid risk to reward for long term buyers! - I had previously called out that NYSE:NVO would have more pain to come when it was in $85-90s I have attached the link with this post for my reader's reference.
- Now, I am turning bullish on this name given these prices and compressed multiples for the growth prospects it offers.
Fundamentally,
Year | 2025 | 2026 | 2027 | 2028
EPS | 3.93 | 4.78 | 5.41 | 5.97
EPS growth% | 25.41% | 21.60% | 13.19% | 10.24%
For a quality name growing EPS > 20% deserves a fair forward multiple of 25.
| Year | Bear (fp/e = 15) | Cons. Base (f. p/e = 20) | Base (fpe = 25) | Bull Case (fpe=30)
| 2025 | $58.95 | $78 |. $98.25. |. $117.9
| 2026 | $71.7 | $95 |. $119. |. $143.4
| 2027 | $81.15 | $108 |. $135 | $162.3
| 2028 | $90 | $119 |. $149.25 | $179.1
As you can see, If you buy NYSE:NVO under $60 then you will be making money even if multiple remains compressed i.e bear case. Only thing you have to do is hold and returns would amplify once there is optimism back in the market which will lead to multiple expansion.
My fair value for NYSE:NVO for this year is $78 based on the conservative base case.
