How might this lawsuit affect the company's valuation multiples (P/E, EV/EBITDA) and relative valuation versus peers?
A class‑action filing against Novo Nordisk injects a new, material‑risk component into the equity story, and the market will price that risk through a downward shift in valuation multiples. Because the case is still in the early‑stage discovery phase, analysts will first discount the forward‑looking earnings stream to reflect a higher probability of a contingent out‑lay or a drag on margins (e.g., legal expenses, potential settlement costs, or a slowdown in product roll‑outs). A 5‑10 % reduction in the FY‑2025 earnings estimate is a typical first‑pass adjustment; that alone would push the P/E from the current ~30× down toward the low‑20s, bringing Novo Nordisk into line with the broader pharma peer group rather than the premium‑growth premium it has historically enjoyed. The EV/EBITDA multiple will see a similar contraction because EBITDA is likely to be trimmed by both the direct legal spend and any indirect impact on sales growth, nudging the ratio from the current ~18× toward the 13‑14× range that peers such as Sanofi and Eli Lilly trade at.
From a relative‑valuation standpoint, the discount widens the spread between Novo Nordisk and its “healthy‑growth” peers, creating a short‑bias on the stock until the litigation risk is clarified. Technically, the market has already reacted with a 3‑4 % pull‑back on the price chart and a breach of the 50‑day moving average, suggesting that the downside is still being priced in. For traders, the actionable signal is to consider a modest short position or a protective put if you remain long, while keeping a close eye on any updates from the court that could either further erode earnings expectations (e.g., a settlement demand) or, conversely, a favorable dismissal that would restore the premium multiples. In the near term, the lawsuit is likely to keep Novo Nordisk’s valuation multiples below peer averages, capping upside until the legal uncertainty is resolved.