Nov 1, 2026 · 1h 31m
Investors test Novo, Moody’s, and Deckers against bear cases
TIP857: S&P Global, Novo, Deckers Brands w/ Stig Brodersen, Tobias Carlisle, & Hari Ramachandra
The discussion shows how valuation, competitive moats, regulation, and growth risks can reshape an otherwise attractive investment thesis.
- 1Novo Nordisk’s depressed valuation reflects both obesity-drug opportunity and serious competition, pricing, and innovation risks.
- 2Moody’s recurring revenue and credit-rating moat appeal to investors despite valuation concerns and dependence on debt issuance.
- 3Deckers combines strong Hoka and UGG brands with cash generation, but fashion cycles and slowing Hoka growth threaten the thesis.
Don't miss
Hari Ramachandra’s Novo Nordisk pitch turns on whether a damaged reputation and lower valuation create an opportunity or reveal a value trap.
The brief
Hari Ramachandra presents Novo Nordisk as a once-dominant company whose falling valuation may signal opportunity—or a value trap exposed by Eli Lilly, pricing pressure, and uncertain innovation.
A brief debate over OpenAI and Anthropic’s calls for AI regulation asks whether safety rules could become barriers to entry that protect incumbents and disadvantage startups or open-source developers.
Stig Brodersen makes the case for Moody’s, emphasizing recurring revenue, credit-rating economics, and a durable moat while the group weighs valuation and the cyclicality of debt issuance.
Tobias Carlisle pitches Deckers as a cash-rich, debt-free owner of Hoka and UGG, but strong brands must withstand fashion cycles, margin pressure, and a slowdown in Hoka’s growth.
The episode’s central discipline is testing every attractive valuation against its bear case: competitive erosion, regulatory risk, slowing growth, and the possibility that a moat is less durable than it appears.
What was said on this episode
61 statements · 37 positive · 15 negative · 6 mixed · 3 neutral
Novo Nordisk trades roughly 12 times forward earnings after falling 40% from its 52-week high.
“that stock is down 40%. And from its 52-week high, and it's trading roughly around 12 times forward earnings.”
Listen at 3:26
Novo Nordisk is a century-old, high-quality business.
“it's a company that's 100 plus year old, great business.”
Listen at 4:12
Novo Nordisk is a good business priced as if it were rapidly deteriorating.
“good business at a price that assumes that it's a melting ice cube”
Listen at 4:26
- Hari Ramachandraon Novo Nordisk operating marginPositive5:38
Novo Nordisk’s operating margin has declined to about 40% but remains healthy versus competitors.
“Now it has kind of reduced to 40%. But it's still healthy compared to many other competitors.”
Listen at 5:38
Eli Lilly leads the obesity-drug market with 60% share, while Novo is second.
“Eli Lilly has taken up 60% of the market share. When Novo is still the second best, but Eli Lilly has the lead now.”
Listen at 6:39
Novo Nordisk can deliver mid-single-digit earnings growth and a 4.5% dividend without another blockbuster.
“my assumption is base case is even in a mediocre scenario, if they can't come up with another blockbuster, the earnings are in the mid single digits. And then we get a dividend of 4.5% to wait.”
Listen at 8:27
Novo Nordisk could return 18% to 22% if its new drugs succeed.
“The returns can be in the upwards of 18% to 22%”
Listen at 11:37
- Hari Ramachandraon Novo Nordisk obesity drugsMixed13:24
Novo Nordisk is positioning its drugs as cheaper but slightly less effective.
“Right now, NOAA is positioning itself as the cost-effective alternative with slightly lower efficacy.”
Listen at 13:24
- Hari Ramachandraon Novo Nordisk obesity drugsMixed14:19
Novo may narrow the efficacy gap with Eli Lilly while competing through lower cost.
“My suspicion is Nuvo will catch up in some aspects in terms of efficacy to the point where it might be still slightly less effective than Tezapatite, for example, but it might compete on cost.”
Listen at 14:19
- Hari Ramachandraon Obesity-drug marketMixed15:08
The obesity-drug market is not winner-take-all, though Eli Lilly currently has an edge.
“From what I've seen so far, it's not a winner-take-all. Eli has definitely an edge over them, and they have 60% market share today.”
Listen at 15:08
Novo Nordisk could produce strong returns if Amicretin succeeds, otherwise returns may be 8–9%.
“I'm expecting really good returns if they're able to be successful with Omicretin. And that's the risk here. Else, you have to be satisfied with a mediocre return of 8% to 9%.”
Listen at 20:58
Most negative news about Novo Nordisk is already reflected in its valuation.
“My thesis here is most of the bad news is baked in.”
Listen at 21:32
Novo Nordisk’s valuation could improve if its pipeline produces successful drugs by 2028–2030.
“if they're able to get out with some good drugs, including Amicretin and others that they have by 28, 29, 30, then the valuation will also change accordingly.”
Listen at 22:01
AI regulation could create regulatory capture risks during the industry’s early stage.
“there is a risk of regulatory capture and especially in this early stage of the game.”
Listen at 26:32
AI regulation proposals from major companies risk producing regulatory capture.
“there is a risk of regulatory capture”
Listen at 26:32
AI regulation could disproportionately harm startups and open-source developers.
“The risk is for a lot of startups and the open source community.”
Listen at 26:44
- Hari Ramachandraon FDA-style AI regulationNegative27:23
FDA-style AI regulation would slow innovation and disadvantage smaller companies.
“Having an FDA for AI, it will slow down the innovation, it will become like pharma, and we don't want to get there.”
Listen at 27:23
S&P Global is a widely recognized company rather than a hidden investment.
“S&P Global. A lot of people probably are familiar with that stock.”
Listen at 28:45
S&P Global's credit-rating business has an attractive business model.
“it's a very interesting business model”
Listen at 32:12
S&P Global and Moody’s dominate the ratings market, with S&P near 45% share.
“The way I'll probably look at this is that S&P has 45%, Moody's around 40%, and then FIT is really a distant third.”
Listen at 32:46
Companies with Moody's ratings also need S&P ratings for bond issuance.
“you also need an S&P rating”
Listen at 33:19
Regulations mandate major rating-agency ratings for many companies issuing bonds.
“you even have regulations that are helping you because for a lot of companies, it's actually mandated. They need to have the ratings of the big rating agencies.”
Listen at 33:21
Lacking major-agency ratings can impede a company's ability to issue bonds.
“if you don't have, partly, you might have problems actually clearing your mandate to issue those bonds in the first place”
Listen at 33:41
S&P Global’s ratings and indices businesses face no major current risks.
“I don't see major risks, at least to ratings and indices.”
Listen at 35:54
Private credit could create competition for S&P Global’s ratings business.
“with private credit, there could be some competition coming.”
Listen at 36:43
Investors expecting less future debt creation should avoid S&P Global.
“if you truly believe that we're going to see less debt creation moving forward, don't buy S&P Global.”
Listen at 38:09
AI could threaten S&P Global’s market-intelligence division.
“AI could be a threat to the market intelligence division.”
Listen at 38:42
S&P Global’s valuation has compressed from 40 times earnings in 2021 to about 23 times.
“It used to trade at 40 PE back in 2021. Now it's closer to 23.”
Listen at 39:22
S&P Global's earnings are expected to continue increasing.
“I do think that it will continue to be so.”
Listen at 39:31
S&P Global has a strong moat, high returns on capital, and substantial protection.
“incredibly moaty, incredible high returns on invested capital, very well protected.”
Listen at 39:51
S&P Global could double over five years, producing roughly 15% annual returns.
“I wouldn't be surprised at all if you saw a double over the next five years, which would give you 15%.”
Listen at 43:02
S&P Global could deliver annual returns between 10% and 15%.
“I'd probably say anywhere between 10% to 15%.”
Listen at 43:53
Stig estimates S&P Global’s prospective annual returns at 10–15%.
“I'd probably say anywhere between 10% to 15%. It's kind of tricky.”
Listen at 43:53
Stig estimates S&P Global’s intrinsic value at $450–$500 per share.
“I'm probably around $450 to $500 if you put me on a spot.”
Listen at 44:03
Removing 80% of market-intelligence revenue would imply S&P Global trades near 38–39 times earnings.
“If you deduct 80% of their market intelligence revenue and translate it into earnings, then they will be at 39 almost in my rough calculation, like 39, 38 PE.”
Listen at 48:09
- Hari Ramachandraon AI financial research toolsNegative49:53
AI may reduce financial-data terminal seats and perform some analyst work.
“the number of seats might reduce. And two, AI will do the job for you rather than having terminal.”
Listen at 49:53
S&P Global’s market-intelligence data products are highly commoditized.
“I definitely think that it's very commoditized.”
Listen at 52:54
AI disruption is unlikely to cause a sudden collapse in market intelligence.
“I don't think it's a cliff by any mean.”
Listen at 53:02
Market-intelligence pricing pressure is unlikely to materially affect S&P Global overall.
“I see a lot of pricing pressure on that segment, but I don't think it's material for the business as such”
Listen at 53:45
S&P Global is relatively safe despite uncertainty about why its valuation is lower.
“It's always like, I'm looking like, what is the catch here? Why are they offering us cheaper than it used to be? And that's where I think we need to dig in a bit more. But definitely, it's one of the safer bets.”
Listen at 57:48
Deckers Outdoor trades at 11 times earnings with $1.6 billion net cash and no debt.
“PE is 11. They've got $1.6 billion in net cash on the balance sheet, no debt.”
Listen at 1:01:59
Deckers Outdoor’s $77 share price implies no future growth.
“At $77, this is being priced. as if it has no growth.”
Listen at 1:03:10
Hoka and UGG have highly loyal customer bases.
“People absolutely love the Hocker running shoe, absolutely love Uggs. They're very loyal customers to those things.”
Listen at 1:03:28
Deckers Outdoor allocates 80% of free cash flow to share buybacks.
“Buybacks are 80% of free cash flow”
Listen at 1:05:51
Deckers Outdoor’s buyback authorization exceeds 40% of its market capitalization.
“the buyback authorization is $4.7 billion, which is more than 40% of that market capitalization.”
Listen at 1:06:10
Deckers shareholders should benefit if modest growth and buybacks continue.
“If they continue to grow at the modest rate that they are and buyback stock at that level, the remaining shares will do very well.”
Listen at 1:06:17
Deckers should continue cash-funded buybacks without taking on debt.
“I think it's a good thing that they continue to buy back stock. I don't want them to go into debt doing the buyback.”
Listen at 1:06:37
Tobias prefers Deckers over On and Nike because of net cash, margins, and valuation.
“I still prefer deck to both net cash and higher margins. I like seven times EV operating profit.”
Listen at 1:07:31
Deckers’ no-growth fair value is about $72 per share versus a $77 price.
“If you assume no growth, fair value is probably... Roughly where it is, maybe a little bit of a discount, $72 versus $77.”
Listen at 1:08:41
Deckers’ growth slowed from about 16% last year to 8% most recently.
“It was sort of 16% last year. It's now 8% sort of to the most recent quarter.”
Listen at 1:09:14
Deckers is relatively safe but has a weaker moat than S&P Global or Novo Nordisk.
“I think it's a reasonably safe bet, although as I said earlier, it's not the sort of moaty business that SPGI or Nova Nordisk is.”
Listen at 1:12:12
Deckers’ base case assumes 3% growth, an 11-times multiple, and $113 fair value.
“My base case, this is just taking management's numbers and just trimming them a little bit. In that instance, I say 3% growth and an 11 times multiple. And that gets me to about $113 as fair value.”
Listen at 1:15:58
Deckers’ bull case reaches about $160 per share but has relatively low probability.
“That gets you to like $160. I think that that's a fairly low probability, but I think it's a kind of comparable probability to the bear case.”
Listen at 1:16:51
Tobias assigns Deckers’ base case a 60% probability.
“The base case, which is the management's case, is a 60% probability.”
Listen at 1:17:05
Deckers Outdoor's scenario-weighted value is approximately $110–$115 per share.
“the mid-range there is something like $110 to $115 versus $72”
Listen at 1:17:09
Deckers’ buybacks can limit downside by concentrating value among remaining shares.
“It really limits your downside because the more they buy back, the more concentrated the value becomes for the shares that remain.”
Listen at 1:17:42
Consumer discretionary stocks will eventually recover and trade at higher multiples.
“the better times will come again and these stocks will probably trade at a higher multiple than they currently trade”
Listen at 1:26:44
US trade policy will remain focused on reshoring, creating continued volatility for Deckers.
“I think that there's going to be a lot of volatility as they figure out what they do, but I don't think that the intention changes over time.”
Listen at 1:27:21
Deckers Outdoor is undervalued based on its financial fundamentals.
“purely on its financials, I think it's too cheap where it is.”
Listen at 1:28:06
A diversified allocation should include gold, dominant franchises, and small-cap value.
“And I think that if you look at the capital allocation philosophies, they'll say some allocation to gold, some allocation to globally dominant franchises, some allocation to small cap value.”
Listen at 1:28:42
Small-cap value investing will experience better future performance.
“I anticipate better times in the future coming.”
Listen at 1:29:23
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
Weekly email
State of the Pod, every Monday
The week's most-discussed names and stories from podcasts, with the moments behind them. Free, five minutes, unsubscribe in one click.