u/Electrical_County_61

Hey everyone, a while back I shared my deep dive on the battle between Eli Lilly and Novo Nordisk. In that post, I argued that while Lilly is currently viewed by the market as the offensive builder, we shouldn't count out Novo Nordisk, as they are patiently building their counterattack, especially in the oral drug market. Today, we got some major news for both companies that perfectly illustrates this dynamic. Novo reported their first quarter numbers for 2026 today and raised their 2026 outlook due to massive GLP-1 momentum. In my original post, I highlighted that oral drugs are the key to transforming the obesity space from an injection niche to a mass market. Novo is proving this thesis right now because their Wegovy pill, launched in the US in January 2026, just delivered the strongest-ever GLP-1 volume launch in US history, racking up over 1.3 million prescriptions in the first quarter alone. I previously noted that Lilly’s tirzepatide led in raw metabolic power and weight reduction. However, Novo just launched Wegovy HD, an injectable 7.2 mg dose, in the US, which has shown a mean weight loss of 20.7 percent, putting them right back in the heavyweight fight regarding efficacy. My deep dive also warned about the continuous drop in net prices due to rebates and pressure from pharmacy benefit managers. We saw this reflected in today's earnings because while reported first-quarter sales jumped 32 percent, heavily boosted by a 340B provision reversal, their adjusted sales actually decreased by 4 percent due to lower realized prices in the US.

Meanwhile, Eli Lilly saw its shares drop. The dip was triggered by a single reported case of liver failure associated with their weight-loss pill, Foundayo, which popped up in the FDA's adverse events database. Analysts from RBC and Evercore called the selloff an overreaction, pointing out that one unverified case does not make a signal and that the drug had a clean liver safety profile across 11,000 patients in Phase 3 trials. Why the sudden drop then? As I discussed in my valuation breakdown, Lilly is currently priced for absolute perfection, trading at a premium forward price-to-earnings ratio of around 45x as the ultimate compounder, while Novo trades at a much cheaper 12x to 13x. When a stock is priced for a winner-takes-all scenario, even a single adverse event report can temporarily spook the market. Overall, today's news reinforces the idea that we are heading toward a durable duopoly rather than a winner-takes-all market. Lilly continues to face the pressure of sky-high expectations, while Novo's focused, specialist approach with oral semaglutide is starting to pay off exactly as planned.

What do you guys think, has Novo proven that the market punished its valuation too harshly?

I recently published a write-up about what I call "The Mother of Deals", specifically diving into the massive implications of the new EU-India trade agreement. I’m honestly surprised by how muted the market’s reaction has been so far. Usually, a structural shift of this magnitude causes significant ripples, but it feels like it is currently flying under the radar while everyone is distracted by US tech earnings and broader macroeconomic noise.

When you look at the underlying mechanics, this is a major net positive for European businesses. It creates a much stronger structural foundation and secures strategic supply chains that allow European industries to better compete on a global scale. While massive, export-heavy giants are always part of the equation, the real long-term value creation here actually goes much deeper, heavily benefiting sectors like machinery, pharma, and infrastructure. This isn't a short-term catalyst, but rather a sustainable value retention driver for the entire European corporate ecosystem.

Right now, the actual financial implications of this deal seem largely unpriced. It feels like one of those situations where the broader market will only wake up and react once the downstream effects actually start showing up in European earnings reports a few quarters from now.

I've attached the link to my full breakdown. Has anyone else been looking into the underlying mechanics of this deal? I am curious to hear your thoughts on why the market is sleeping on this deal.

Everyone is looking at Nike’s massive drawdown and wondering if this is the time to buy the bottom. To be fair, the bullish case isn't crazy: it's an iconic global brand, they've shaken up leadership, and the stock is hovering around decade-low levels. A successful turnaround is absolutely on the table. However, investing is all about opportunity cost and risk-adjusted returns, and when you look at Nike objectively today, the math simply doesn't justify an entry right now.

Even after the brutal drop, Nike isn't trading at deep-value, "priced for disaster" levels. You are still paying a multiple that assumes management can fix the structural issues fairly quickly. If the turnaround takes longer than expected, which large-scale retail restructurings usually do, there is still plenty of room for the stock to fall further. Furthermore, Nike isn't just fighting its own supply chain and legacy inventory issues; they are actively losing the premium consumer to agile competitors like Hoka and On Running. Winning those buyers back will require heavy investment in innovation and marketing, which will likely keep margins depressed in the near term.

This brings us to the ultimate dealbreaker: opportunity cost. Why park your capital in a complex, multi-year "show-me" story with significant execution risk, when the broader market is full of companies offering better visibility, stronger momentum, and less uncertainty? Nike will probably figure it out and recover in the long run, but right now, you are taking on the risk of a messy restructuring without getting a wide enough margin of safety in return. Until there are concrete, measurable signs that top-line growth and market share are stabilizing, there are simply better, lower-risk places to put your money to work.

My reasoning is explained in detail in the article.