Swiss healthcare giant Novartis (NVS) delivered better-than-expected second-quarter results and raised its profitability outlook for the full year. Sales of its prostate cancer drug Pluvicto, however, failed to impress investors.
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Novartis’ Q2 Performance
With a year-over-year increase of 9.4%, revenue of $12.51 billion came in better than expectations by $140 million. Furthermore, EPS of $1.97 comfortably outpaced estimates by $0.12. This was a 21% growth in the company’s bottom line.
The quarter was marked by robust sales momentum in Novartis’ key products. Sales of Entresto, Cosentyx, and Kesimpta jumped by 28%, 22%, and 65%, respectively. In tandem, Pluvicto and Leqvio sales rose by 44% and 134%, respectively. Still, Pluvicto’s growth came in lower than the Street’s expectations. The company is now banking on a boost for the prostate cancer treatment from a potential approval for the drug in a “new group of patients.”
Overall, though, NVS delivered a robust performance for the quarter with its operating income and net income soaring by 43% each. Furthermore, the company’s free cash flow expanded by 40% to $4.6 billion during this period. Novartis remains focused on four core therapeutic areas: cardiovascular-renal-metabolic, immunology, neuroscience, and oncology. Remarkably, the company has assets in the pipeline in each of these areas.
Hiked Outlook
Importantly, Novartis has increased its profitability outlook for Fiscal year 2024. Core operating income during this period is estimated to grow in the mid-to-high teens, compared to the prior outlook of low double-digit to mid-teens growth. Net sales for the year are expected to rise in high single to low double digits.
What Is the Target Price for NVS Stock?
Novartis’ stock price has increased by nearly 17% over the past year. Overall, the Street has a Moderate Buy consensus rating on the stock, alongside an average NVS price target of $119.38. However, analysts’ views on Novartis could see changes following today’s earnings report.
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