Novo Nordisk vs. Eli Lilly: A Deep Dive into the DNA of Diabetes Leaders
Comparing Foundations and Charts for a Medium–Long Term Portfolio Tilt
Two giants. One sweet spot: diabetes. Which one earns a bigger slice of your overweight?
Over the past decade, Novo Nordisk NVO 0.00%↑ and Eli Lilly LLY 0.00%↑ have emerged as the titans of metabolic and diabetes care. With accelerating topline growth, fortress-like balance sheets, and compelling technical setups, both names call for a fresh look. In this analysis, we:
Unpack the fundamentals: growth, profitability, cash flows, forecasts.
Read the charts: key levels, momentum, trend strength.
Compare head-to-head: where does each shine?
Craft a medium–long term playbook: position sizing, entry zones, targets, stops.
Whether you’re an institutional allocator or retail self-directed, this one-stop post arms you with crisp, actionable insights.
Key Takeaways
Fundamentals: Both companies deliver double-digit earnings growth, high ROE and robust free cash flow. Lilly edges Novo on near-term revenue growth forecasts; Novo wins on margin stability and debt neutrality.
Technicals: NVO has cleared the 61.8% retracement (~$78.20), opening the way to the 1.618 extension around $96.50. LLY has stalled at its 0.786 retracement (~$802) but is still trading above both its 50-day (≈$781) and 100-day (≈$780) moving averages, which are holding as support.
Comparative Edge: Novo Nordisk offers a slightly higher margin of safety (lower leverage, clearer uptrend). Eli Lilly has stronger near-term growth catalysts (like newly approved GLP-1 therapies) but trades nearer its 200 DMA.
Trade Plan: Overweight NVO into dips toward $74–76, target $96 over 6–12 months; selective LLY exposure on pullbacks to $775–780, target $868.
Fundamental Analysis
Novo Nordisk (NVO)
Revenue & EPS Growth: ~10–12 % CAGR last 3 years; guidance for mid-teens EPS acceleration on strong Ozempic/GLP-1 adoption.
Profitability: Net margins ~25%; ROE north of 50%.
Balance Sheet: Minimal debt; cash ≈ short-term investments cover >100 % of liabilities.
Cash Flow: Free cash flow yield ~4–5 %; reinvestment in R&D remains disciplined.
Analyst Forecasts: Consensus sees EPS growing ~15 %–18 % annually for next 2 years.
Eli Lilly (LLY)
Revenue & EPS Growth: ~15 % EPS CAGR last 3 years; boosted by Trulicity, Mounjaro, and pipeline wins.
Profitability: Net margins ~30%; ROE ~65%.
Balance Sheet: Moderate debt (“investment-grade”); net debt/EBITDA ~1.5×.
Cash Flow: FCF yield ~3–4 %; elevated CapEx for capacity expansion.
Analyst Forecasts: EPS growth forecasts ~18 %–20 % annually as GLP-1 franchise scales.
Growth vs. Stability: the eternal tug-of-war.
Technical Analysis
Novo Nordisk (NVO)
Trend: Uptrend confirmed, price above 50/100/200 D MAs on daily and weekly.
Fibonacci: Retraced 61.8 % of the June–July sell-off (~$78.20) and held that zone; 1.618 extension projects to $96.50, then 2.618 at $114.80.
Momentum: RSI near 70, watch for mild overbought, but still room vs. 85 extremes. ADX (~22) suggests trend strength rebuilding.
Support Zones: $71.00–72.00 (June lows), $69.00 (50 DMA).
Volume: Gradual uptick on green candles signals institutional accumulation.
Eli Lilly (LLY)
Trend: Consolidating between 50/100/200 DMA; hourly charts show recent moving-average “node.”
Fibonacci: Pullback stalled near 78.6 % of the June rally (~$802). A clean break above that could see $827 (1.618) and $868 (2.618).
Momentum: Daily RSI ~55–60 (neutral); hourly Stoch-RSI shows overbought short-term, expect minor pullback.
Support Zones: $780–782 (50 DMA and 0.618 fib retrace), then $768 (June low).
ADX/ATR: ADX ~19 (trend weak), ATR declining (lower volatility), typical consolidation.
When charts whisper, promise awaits.
Head-to-Head Comparison
Earnings Growth
• Novo Nordisk is forecast to grow EPS by roughly 15–18% annually.
• Eli Lilly looks even stronger, with 18–20% EPS growth penciled in.Profitability
• Novo delivers a healthy net margin of about 25%.
• Eli Lilly is even leaner, cruising at roughly a 30% margin.Balance-Sheet Strength
• Novo Nordisk carries almost no debt, giving it a clean, zero-leverage profile.
• Eli Lilly carries moderate leverage, with a debt-to-equity ratio near 30%.Free-Cash-Flow Yield
• Novo Nordisk converts into cash at about a 4–5% yield.
• Eli Lilly trails slightly, at around 3–4%.Chart Setup
• Novo Nordisk is in a clear uptrend, having broken key retracements.
• Eli Lilly is consolidating and coiling, poised for its next directional move.Risk/Reward Profile
• Novo offers a wider safety margin, clean balance sheet and steady cash flow.
• Eli Lilly promises higher short-term growth, but with tighter downside buffers.
Verdict
Novo Nordisk is the more conservative, “sleep-well” choice, with strong uptrend and debt-free balance sheet.
Eli Lilly carries slightly higher growth runway but needs a clean breakout above near-term resistance and tighter risk control.
Our Trade Plan
Allocate: Overweight NVO (60 % of diabetes allocation), underweight LLY (40 %).
Entry (NVO): Add on dips toward $74–76, stop below $69.
Entry (LLY): Scale in on pullbacks to $775–780, stop below $768.
Targets (12 months):
NVO → $96 (1.618 fib), then $115 (2.618 fib).
LLY → $868 (2.618 fib), then $937 (2.618 on higher base).
Review Points: Revisit post-earnings (Oct–Nov 2025) and upon major FDA decisions.
Plan the swing; manage the sting.
Bottom Line
Both Novo Nordisk and Eli Lilly stand at the forefront of metabolic therapies with enviable fundamentals and compelling technical setups. For a medium–long term portfolio, Novo Nordisk delivers a smoother ride and stronger safety buffer, while Eli Lilly offers higher immediate growth at the cost of tighter risk controls.
Choose your mix based on risk tolerance:
Conservative tilt: 80 % NVO / 20 % LLY
Balanced growth: 60 % NVO / 40 % LLY
Aggressive growth: 40 % NVO / 60 % LLY (with strict stops)
May your dosing stays accurate, both in medicine and portfolio management
This analysis is for informational purposes only and does not constitute financial advice.