Shares of Novo Nordisk (NVO -21.45%) are plunging on Tuesday, down 21% as of 2:10 p.m. ET. The drop comes as the S&P 500 (^GSPC) and the Nasdaq Composite (^IXIC) both lost 0.3%.

The Danish pharmaceutical giant announced it was cutting its full-year guidance ahead of its upcoming earnings on Aug. 6. The news overshadowed the company's appointment of a new CEO.

Novo names new CEO and cuts guidance

On Tuesday, Novo Nordisk named Mike Doustdar as the company's new CEO. He'll begin his tenure on Aug. 7, just months after the unexpected removal of its previous CEO, Lars Fruergaard Jørgensen.

While the company was optimistic about the leadership change -- board chairman Helge Lund described him as "the best person to lead Novo Nordisk through its next growth phase" -- investors were unimpressed given the company's announcement that it was slashing guidance.

The company now expects full-year sales growth of 8% to 14%, down significantly from 13% to 21%. Its guidance for operating profit was cut as well, from between 16% and 24% to between 10% and 16%.

Image source: Getty Images.

Novo cited weaker U.S. sales of its blockbuster weight loss drugs, Wegovy and Ozempic.

Novo needs to turn the ship around

Despite the disappointment in sales, I think there is a good chance that Novo will be able to reverse course. The company was facing significant competition from compounded versions of the drug. Moving forward, this is less of a threat as the FDA restricts its sales.

Furthermore, the company's stock is trading at one of its lowest price-to-earnings ratios (P/E) in nearly 30 years and hasn't traded this low since before 2020, presenting an opportunity in my eyes.