Værdiansættelse af Novo Nordisk

Mark Francis Johannesson

Studenteropgave: Kandidatafhandlinger


The subject of this thesis is a valuation of Novo Nordisk A/S, which is one of Denmark’s leading pharmaceutical companies and its shares trade on NASDAQ OMX Copenhagen. The company researches, develops and manufactures products within two major business areas, diabetes and biopharmaceuticals, with an approximate revenue split of ¾ and ¼, respectively. The insulin market within which Novo Nordisk operates is categorized as a differentiated oligopoly, where the company is the market leader with a global market share of insulin of 47 percent, along with diabetes treatment of 27 percent. Its two major competitors are Sanofi Aventis and Eli Lilly. In the strategic analysis, the models PEST-LE, Porters Five Forces, Ansoff’s growth matrix, value chain analysis have been applied, and the key highlights of these are concluded upon in a SWOT analysis. On a macroeconomic level, Novo Nordisk risk is low, as a lot of the medicine produced by the company is vital to the treatment of persons. For this reason, the general recession caused by the financial crisis has had little impact on its earnings. In the industry and growth analyses, it is concluded that there is fierce competition for existing customers, which puts pressure on prices, but on the other hand, there are great opportunities for growth through an increasing BMI in the world population as well as new and interesting development projects. In the internal analysis, the Novo Noridsk position is strong. There are no major patent expirations in the short term, which, from a perspective of earnings, means that there are some good years ahead despite increasing price pressure from public customers. The financial statement analysis is based on a 10 year period from 2006 to 2015, where Novo Nordisk, based on the profitability analysis, has seen a positive development in ROIC, profit margin and turnover of invested capital. NOPAT increases drastically from 11,881 mio. DKK in 2009 to 23,511 mio. DKK in 2012, primarily due to an increased sales volume of modern insulins along with the success of Victoza. We see another increase from 26,766 mio. DKK in 2014 to 39,152 mio. DKK in 2015, primarily due to sales of the new generation of insulin, Tresiba, Ryzodeg and Xultophy. The company’s beta value is calculated to 0,571, where MSCI World Index is used as a market portfolio, and WACC is calculated at 0,074435. The value is calculated using budgeting with both DCF- and RIDO models to test the results' robustness, and the theoretical market value of equity is estimated to 836,468 mio. DKK per. December 31st 2015, which translates to a share price of 405.55 DKK. The fact that the market price is lower than the calculated theoretical value means that other analysts and market players assess the price to be lower. The market price is always the correct value and my analysis performed with my subjective view of the future.

UddannelserCand.merc.fir Finansiering og Regnskab, (Kandidatuddannelse) Afsluttende afhandling
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