Following yesterday's earnings reports from Novo Nordisk and Eli Lilly, Eli Lilly's shares continue to trade close to record highs, while Novo Nordisk remains around 70% below its 2024 peak. For many Danish investors, it may seem difficult to reconcile such a sharp valuation gap with the progress Novo Nordisk has made in recent months - including a change in leadership, the highly anticipated launch of the oral version of Wegovy, and the extensive organisational cost-cutting programme initiated last year.
The short answer is that the market still expects Eli Lilly to emerge as the winner across the four key competitive battlegrounds that will define the obesity and diabetes markets over the coming years. As a result, Novo Nordisk is increasingly viewed as the industry's clear underdog. As long as this remains the prevailing market narrative, investors should not expect a meaningful re-rating of Novo Nordisk's shares. On the other hand, being the underdog could ultimately become a significant advantage. If Novo Nordisk can challenge the market's current assumptions over the coming quarters and years, the upside for the stock could be substantial.
Broadly speaking, the competition for leadership in the obesity and diabetes markets can be divided into four major battlegrounds.
By focusing on the treatments for type 2 diabetes, until 2024–2025, Novo Nordisk was widely regarded as the market leader in the battle between Ozempic and Mounjaro. However, during 2026, Mounjaro sales have grown significantly faster than Ozempic sales. Although Novo Nordisk exceeded market expectations for Ozempic revenue in yesterday's earnings report, Eli Lilly continues to deliver substantially stronger growth for Mounjaro.
As the chart below illustrates, consensus forecasts expect this trend to continue over the coming years, with Eli Lilly maintaining a clear lead in revenue growth.
The same pattern can be seen in expectations for Wegovy versus Zepbound. These products are based on the same molecules as Ozempic and Mounjaro but are marketed exclusively for obesity treatment. Once again, the market's conclusion is the same: Novo Nordisk is expected to plateau at around its 2025 sales level, while Eli Lilly is forecast to roughly double its 2025 sales by 2028.
But what about oral Wegovy? Surely Novo Nordisk has the upper hand there? The answer is yes - if the focus is on 2026 alone. Looking beyond next year, however, consensus forecasts paint a different picture. Bloomberg estimates suggest that sales of oral Wegovy will be overtaken by Eli Lilly's newly launched obesity pill, Foundayo, by the end of 2027. These are, of course, market expectations rather than a certainty. Novo Nordisk could still prove the market wrong, but as the chart below shows, investors currently expect Eli Lilly to gain the upper hand in the oral obesity market as well.
The fourth and final battleground is the next generation of injectable obesity therapies - the successors to Wegovy and Zepbound that both companies are expected to launch in 2027. Initially, Bloomberg consensus estimates suggest that Novo Nordisk's highly anticipated CagriSema will outsell Eli Lilly's Retatrutide in 2027. However, the lead is expected to be short-lived. From 2028 onwards, consensus forecasts once again point to Eli Lilly overtaking Novo Nordisk, with Retatrutide projected to become the higher-selling next-generation obesity treatment.
Overall, this may sound like a bleak outlook for Novo Nordisk - and to some extent, it is. However, it also helps explain why the two companies trade at such different valuations. Today, Novo Nordisk trades at around 11x earnings, while Eli Lilly commands a multiple of roughly 33x. In other words, the market has already priced in Novo Nordisk as the likely loser and Eli Lilly as the likely winner across almost every major competitive battleground.
While expectations ultimately drive share prices, investors should remember that expectations are not the same as reality. If Novo Nordisk can reignite growth over the coming years and prove the market wrong, the upside for the shares could be substantial - particularly because expectations are currently so low and the company is viewed as the underdog across all four key battlegrounds.
On the other hand, if today's consensus forecasts prove accurate, investors should probably put aside hopes of a return to the DKK 1,000 share price levels seen during Novo Nordisk's glory days in 2024.
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