In a report released today, James Quigley from Goldman Sachs downgraded Novartis AG to a Sell, with a price target of CHF94.00.
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James Quigley has given his Sell rating due to a combination of factors impacting Novartis AG. The company’s valuation appears overstretched, especially considering the looming challenges from loss of exclusivity (LoEs) on key drugs. This situation is expected to lead to a structural decline in Novartis’ growth rate after several years of high single-digit to low double-digit sales growth.
Furthermore, the momentum in earnings is anticipated to diminish following the introduction of generic versions of Entresto, a major product. The anticipated news flow for the next 12 to 18 months seems limited, which could further impact investor sentiment. Quigley also notes that the recent rise in Novartis’ stock price does not sufficiently account for these forward risks, leading to a downgrade to a Sell rating with a target price suggesting an approximate 8% downside from current levels.
In another report released on September 10, Barclays also maintained a Sell rating on the stock with a CHF90.00 price target.