Novartis downgraded to Sell from Neutral at Goldman Sachs

Goldman Sachs analyst James Quigley downgraded Novartis (NVS) to Sell from Neutral with a price target of $118, down from $119. Novartis has been the best performing stocks in European pharma over the last five years, but its growth rate will “structurally reset lower,” the analyst tells investors in a research note. The firm believes the company’s earnings momentum story is “less clear” post the launch of Entresto generics, while news flow catalysts over the next 12-18 months “is fairly quiet.” Goldman believes Novartis’ recent share outperformance and multiple expansion do not reflect the risks ahead from loss of exclusivities. It sees a “stretched” valuation at current shared levels.