Novartis: Resilient Core Performance and Medium-Term Pipeline Catalysts Support Buy Rating Despite Near-Term Guidance Softness

Morgan Stanley analyst Thibault Boutherin maintained a Buy rating on Novartis AG today and set a price target of CHF115.00.

Thibault Boutherin has given his Buy rating due to a combination of factors that balance near-term guidance softness with reassuring medium-term fundamentals. While Q4 2025 revenue was modestly below expectations due to specific U.S. revenue deductions in key products, underlying sales, core EBIT, and core EPS tracked in line, suggesting that the operational performance remains solid beneath these technical effects. The FY 2026 outlook, once currency effects are incorporated, points to sales broadly matching consensus and only a marginal shortfall in core EBIT, with the first half reflecting known loss-of-exclusivity headwinds and Avidity-related margin dilution, followed by a re-acceleration in the second half.

At the same time, Boutherin highlights that Novartis has reaffirmed its mid-term ambitions, including a 5–6% compound annual sales growth rate from 2025 to 2030 and a return of core EBIT margins to above 40% by 2029, despite the temporary dilution from the Avidity acquisition. Although several pipeline milestones have been pushed back, the overall development trajectory remains intact, and he expects investor attention to shift toward upcoming data readouts and regulatory events across key programs such as pelacarsen, Avidity’s RNA-based assets, and remibrutinib in RRMS and chronic urticaria. In his view, the combination of resilient core performance, clearly communicated 2026 phasing, robust long-term growth and margin targets, and a rich set of medium-term pipeline catalysts underpins a favorable risk-reward profile that justifies a Buy recommendation on Novartis shares.

According to TipRanks, Boutherin is a 3-star analyst with an average return of 4.7% and a 59.02% success rate. Boutherin covers the Healthcare sector, focusing on stocks such as Novartis AG, Lonza Group Ltd, and Novartis.

In another report released today, Bank of America Securities also maintained a Buy rating on the stock with a CHF130.00 price target.