The stock of the world’s largest insulin supplier, Novo Nordisk (NYSE: NVO), has taken a massive hit after Q3 earnings were released in October. In the first minutes after the European stock market opened, the massive sell-off took the stock down as much as 20%. At the end of the day, NVO closed down 14%, which is a rare event for a blue-chip company. Since its August 2015 high, the company has lost about 40%.
At first glance, the earnings NVO published were not really alarming, but showed a solid performance. Net sales grew 4% in the first 9 months compared to the same time last year; net profit grew 10%, while diluted earnings per share grew 12% (or even 22% if the number is adjusted for non-recurring income). As these are numbers other companies are dreaming of, we have to ask: What happened? Why the massive drop?