NVO Short Interest Hits Year High Before Wednesday's Print

NVO short sellers have added roughly 40% more shares since late September, pushing borrowed positions to their highest level in at least a year at 37.8 million shares, even as the stock has edged up 4.4% over the past month to $40.

The borrowing build is the clearest pre-earnings signal in the data. Short positions were largely flat through most of September and into early October, holding near 27 million shares. Then they broke higher in two waves: a first jump in the week of October 9, and a second climb between October 22 and 26, leaving short interest up 15.6% on the week. The lending market has not tightened meaningfully in response. Availability is generous at 374%, meaning there are more than three shares available to borrow for every share already lent out, well above last year's floor of 93.6%. Borrowing costs dropped 60% over the past week to just 0.23%, the lowest in the observation window. Options positioning is slightly more cautious than usual: the put/call ratio is at 0.70, about one standard deviation above its 20-day average of 0.66, but well short of the defensive extremes seen earlier in the year.

The analyst community has been moving firmly in one direction. Morgan Stanley downgraded NVO to Underweight in September, keeping its price target at $40, which is exactly where the stock is trading now. BMO Capital cut its target in October from $47 to $40, the same level, while maintaining a Market Perform rating. Goldman Sachs moved to Neutral earlier in 2026, dropping its target from $63 to $41. The consensus mean target of $301 appears stale and reflects DKK-denominated Danish exchange targets rather than the ADR price; the $40 to $41 cluster from firms covering the NYSE-listed shares is the operative range. Against that backdrop the bear case is straightforward: Wegovy and Ozempic revenue growth is decelerating, with Q1 North American Wegovy sales running well below consensus at the time estimates were made. The bull case rests on Novo's roughly 20% share of the global diabetes treatment market and the cultural entrenchment of its GLP-1 brands, with the SURMOUNT-5 trial data providing some pipeline support even if tirzepatide demonstrated superiority over semaglutide there.

One data point adds texture to the revenue picture. Centers for Medicare and Medicaid Services data show Medicaid dollars reimbursed for NVO drugs fell 19% versus Q1 last year, with units reimbursed down by the same proportion in the January 2026 quarter. Neither the generic drug prices dataset nor the Medicaid utilisation series has been measured to lead the company's reported figures, so this cannot be treated as predictive. But a sharp drop in government-programme volumes is consistent with the bear thesis that volume growth for the core GLP-1 franchise is under pressure.

Past earnings reactions for NVO have been punishing. The two most recent prints both produced single-day falls of roughly 8% to 9%, with five-day losses extending to around 10.5% on each occasion. The August 2026 print was the exception, generating a 3.8% one-day gain and a 4.8% five-day move. The current short build, concentrated in the two weeks before Wednesday's release, suggests a subset of the market is positioned for a return to the more negative pattern.

Wednesday's print will test whether the underlying volume trajectory for Wegovy and Ozempic in North America can close the gap with what the Street modelled a year ago, or whether the deceleration has continued into the third quarter.