Novartis AG (CH:NOVN)
:NOVN
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Novartis AG
(NOVN)
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Rating:69Neutral
Price Target:
CHF126.00
▲(6.04% Upside)
Action:DowngradedDate:04/29/26
The score is driven primarily by strong underlying profitability and cash generation, partially offset by higher leverage and recent softness in TTM revenue/free cash flow. Technical indicators are currently weak and weigh on the score, while reasonable valuation and dividend support it. The latest earnings call was constructive on execution and mid-term outlook, but near-term guidance and 2026 headwinds limit upside.
Positive Factors
High Profitability
Sustained high gross and operating margins indicate structural pricing power and efficient cost structure across Novartis’s portfolio. Durable margins support reinvestment in R&D, cushion against reimbursement pressure, and underpin long‑term cash generation and shareholder returns.
Negative Factors
Rising Leverage
Higher leverage reduces balance‑sheet cushion versus prior years and increases interest and refinancing risk, limiting flexibility for opportunistic investments. In a rising‑rate or cost‑of‑funds environment this can pressure net financial income and constrain capital allocation over months to years.
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Positive Factors
Negative Factors
High Profitability
Sustained high gross and operating margins indicate structural pricing power and efficient cost structure across Novartis’s portfolio. Durable margins support reinvestment in R&D, cushion against reimbursement pressure, and underpin long‑term cash generation and shareholder returns.
Read all positive factors
Novartis AG (NOVN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF206.95B
Dividend Yield3.18%
Average Volume (3M)2.71M
Price to Earnings (P/E)23.4
Beta (1Y)0.99
Revenue Growth-4.75%
EPS Growth-1.04%
CountryCH
Employees75,883
SectorGeneral
Sector StrengthN/A
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)6.98
Shares Outstanding2,034,819,500
10 Day Avg. Volume2,438,245
30 Day Avg. Volume2,709,021
Financial Highlights & Ratios
PEG Ratio0.66
Price to Book (P/B)5.81
Price to Sales (P/S)4.69
P/FCF Ratio14.54
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF121.83Price Target Upside2.54% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)8.74
Revenue Forecast (FY)CHF56.83B
Novartis AG Business Overview & Revenue Model
Company Description
Novartis AG researches, develops, manufactures, and markets healthcare products worldwide. The company operates through two segments, Innovative Medicines and Sandoz. The Innovative Medicines segment offers prescription medicines for patients and ...
How the Company Makes Money
Novartis makes money primarily by selling patented prescription pharmaceuticals and related therapies worldwide. Its core revenue stream comes from product sales of branded medicines, where pricing and volume are driven by clinical adoption, reimb...
Novartis AG Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 21, 2026
Earnings Call Sentiment Positive
Overall the call is Positive. Novartis reported strong full-year execution — record free cash flow, achievement of a 40.1% core margin two years early, multiple blockbuster product performances, and meaningful pipeline progress with numerous upcoming pivotal readouts. Near-term headwinds are material (largest-ever generic/patent expiries in 2026, Q4 gross-to-net and LOE impacts, Avidity-related margin dilution, and some trial uncertainties such as lower-than-expected event rates for pelacarsen and limited FDA-requested liver monitoring for remibrutinib). Management provided a cautious 2026 outlook (H1 weakness, full-year low-single-digit sales growth) but reiterated mid-term confidence (5%–6% CAGR to 2030 and return to 40%+ margin by 2029). Taken together, the positives around cash generation, portfolio momentum and pipeline execution outweigh the near-term operational and regulatory challenges.Positive Updates
Full-Year Sales and Margin Achievement
Full-year 2025 sales grew 8% (high single-digit). Core operating income rose 14% and Novartis achieved a 40.1% core margin (target reached two years early). Core operating income reached approximately $21.9 billion.
Negative Updates
Q4 and Near-Term Sales Impact from Generics and Gross-to-Net
Q4 2025 sales declined 1% due to gross-to-net adjustments and loss of exclusivity impacts (Entresto LOE and U.S. generic entries including Promacta and Tasigna). Excluding R&D out-of-period adjustments underlying Q4 sales would have been +3%.
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Q4-2025 Updates
Positive
Negative
Full-Year Sales and Margin Achievement
Full-year 2025 sales grew 8% (high single-digit). Core operating income rose 14% and Novartis achieved a 40.1% core margin (target reached two years early). Core operating income reached approximately $21.9 billion.
Read all positive updates
Company Guidance
Novartis guided 2026 full-year sales to grow low single‑digit and core operating income to decline low single‑digit (reflecting a 1–2 percentage‑point core‑margin dilution from the Avidity deal expected to close in H1 2026), with core net financial income/expense around $1.7 billion and a core tax rate of ~16.5%; they expect H1 2026 sales to decline low single‑digit and core operating income to decline low double‑digit (Q1 also facing a headwind from a +2% gross‑to‑net in the Q1‑25 base), with a rebound in H2 to mid‑single‑digit sales growth and mid‑to‑high‑single‑digit core operating income growth, a positive FX sensitivity (late‑Jan rates) of roughly +2–3 percentage points to sales and +1 point to core operating income, a 5–6% sales CAGR for 2025–2030, and a plan to return to 40%+ core margin by 2029.Novartis AG Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
72
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 55.47B | 57.13B | 51.72B | 46.66B | 43.46B | 43.97B |
| Gross Profit | 41.67B | 42.86B | 38.90B | 34.19B | 31.88B | 32.24B |
| EBITDA | 21.86B | 23.96B | 20.71B | 18.25B | 14.68B | 30.91B |
| Net Income | 13.48B | 14.65B | 11.94B | 14.85B | 6.96B | 24.02B |
Balance Sheet | ||||||
| Total Assets | 118.89B | 115.49B | 102.25B | 99.94B | 117.45B | 131.79B |
| Cash, Cash Equivalents and Short-Term Investments | 7.00B | 11.58B | 13.35B | 13.96B | 18.61B | 28.11B |
| Total Debt | 47.14B | 37.01B | 31.26B | 26.35B | 27.91B | 31.02B |
| Total Liabilities | 79.84B | 68.97B | 58.12B | 53.20B | 58.03B | 63.97B |
| Stockholders Equity | 38.63B | 46.10B | 44.05B | 46.67B | 59.34B | 67.66B |
Cash Flow | ||||||
| Free Cash Flow | 16.63B | 18.43B | 13.80B | 11.71B | 11.56B | 12.10B |
| Operating Cash Flow | 18.98B | 20.05B | 17.62B | 14.46B | 14.24B | 15.07B |
| Investing Cash Flow | -16.75B | -5.11B | -7.51B | 5.60B | 1.47B | 4.21B |
| Financing Cash Flow | -2.52B | -15.57B | -11.74B | -14.28B | -20.56B | -16.26B |
Novartis AG Technical Analysis
Neutral
118.82
Price Trends
120.91
Negative
113.88
Positive
105.37
Positive
Market Momentum
-0.23
Positive
46.16
Neutral
10.08
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:NOVN, the sentiment is Neutral. The current price of 118.82 is below the 20-day moving average (MA) of 119.58, below the 50-day MA of 120.91, and above the 200-day MA of 105.37, indicating a neutral trend. The MACD of -0.23 indicates Positive momentum. The RSI at 46.16 is Neutral, neither overbought nor oversold. The STOCH value of 10.08 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CH:NOVN.
Novartis AG Risk Analysis
Novartis AG disclosed 26 risk factors in its most recent earnings report. Novartis AG reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Novartis AG Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | CHF251.68B | 20.28 | ― | 2.88% | 1.69% | 55.73% | |
69 Neutral | CHF206.95B | 23.38 | ― | 3.18% | -4.75% | -1.04% | |
63 Neutral | CHF38.49B | 59.78 | ― | 0.09% | 11.15% | 150.71% | |
62 Neutral | CHF24.57B | 48.85 | 3.69% | 0.44% | -3.08% | -33.39% | |
56 Neutral | CHF32.92B | 19.54 | ― | 0.75% | -0.65% | -143.04% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
CH:NOVN
Novartis AG
113.70
24.73
27.79%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.