Cautious Hold Rating for Novartis AG Amid Mixed Performance and Future Uncertainties

Bank of America Securities analyst Graham Parry has maintained their neutral stance on NOVN stock, giving a Hold rating yesterday.

Graham Parry has given his Hold rating due to a combination of factors influencing Novartis AG’s current and future performance. Despite the company’s first-quarter earnings per share exceeding expectations by 7% due to strong operating margins, the sales figures were only slightly above consensus, with some of the gains attributed to one-off adjustments. Additionally, while key product launches such as Scemblix and Kisqali showed growth, they did not surpass expectations significantly, which tempers enthusiasm for the stock.
Parry also notes that while the guidance for core operating income has been raised to the upper end of the previous range, it aligns with consensus expectations, indicating limited upside potential. Furthermore, there are concerns about the impact of potential pharmaceutical tariffs and the lack of significant data catalysts in the near term. The anticipated loss of exclusivity for major products like Cosentyx and Kisqali post-2028 further contributes to the cautious outlook, leading to the Hold rating.

In another report released yesterday, Goldman Sachs also maintained a Hold rating on the stock with a CHF102.00 price target.