Novartis AG (NOVN) AI Stock Analysis

• Market Cap: CHF183.05B
• Dividend Yield: 3.64%
• Average Volume (3M): 2.93M
• Price to Earnings (P/E): 16.8
• Beta (1Y): 0.85
• Revenue Growth: 6.34%
• EPS Growth: -13.16%
• Country: CH
• Employees: 75,883
• Sector: Healthcare
• Sector Strength: 42
• Industry: Drug Manufacturers - General
• EPS (TTM): 1.88
• Shares Outstanding: 2,112,421,900
• 10 Day Avg. Volume: 3,409,803
• 30 Day Avg. Volume: 2,932,965
• PEG Ratio: 1.90
• Price to Book (P/B): 5.61
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.90
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: 1.14
• Enterprise Value/Gross Profit: 5.75
• Enterprise Value/Ebitda: 2.85
• 1Y Price Target: CHF102.78
• Price Target Upside: 6.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 81 Outperform
• Price Target: CHF108.00 ▲(12.29%Upside)

Novartis AG's overall stock score is primarily driven by its strong financial performance and positive earnings call sentiment. The company's stable valuation and balanced technical indicators support the score, despite minor challenges in product distribution and geopolitical factors.

Positive Factors

Clinical Trials

Novartis announced that the PSMAddition trial in metastatic hormone-sensitive prostate cancer has met the primary endpoint of radiographic progression-free survival with a positive trend in Overall Survival.

Financial Performance

Pluvicto is expected to have significant peak sales, contributing positively to Novartis's financial performance.

Sales Growth

Strong sales growth driven by key products like Entresto, Cosentyx, Kisqali, Kesimpta, and Scemblix.

Negative Factors

Exclusivity Loss

The company faces growth challenges beyond certain years due to loss of exclusivity for key products like Cosentyx, Kesimpta, and Kisqali.

Pipeline Risk

The pipeline for Phase III trials is considered high-risk, particularly for Ianalumab in Sjogren’s syndrome and the pelacarsen Lp(a) inhibitor.

Tariff Uncertainty

Uncertainty regarding the timing and impact of pharmaceutical tariffs creates near-term challenges.

Novartis AG Business Overview & Revenue Model

Company Description

Novartis AG is a global healthcare company based in Switzerland, engaged in the research, development, manufacturing, and marketing of a wide range of healthcare products. The company operates through two main segments: Innovative Medicines and Sandoz. Innovative Medicines focuses on patented prescription medicines, primarily in the areas of oncology, cardiovascular, renal and metabolism, immunology, dermatology, ophthalmology, neuroscience, and respiratory diseases. Sandoz is a global leader in generic pharmaceuticals and biosimilars, providing affordable medicines across various therapeutic areas.

How the Company Makes Money

Novartis AG generates revenue primarily through the sale of its pharmaceuticals and biosimilars. The Innovative Medicines segment is the largest contributor to the company's revenue, deriving income from the sales of patented prescription drugs. Novartis invests heavily in research and development to innovate and bring new drugs to market, which are often protected by patents, allowing the company to maintain pricing power and market exclusivity for a set period. The Sandoz segment contributes to revenue by producing and selling generic drugs and biosimilars, which are more affordable versions of brand-name drugs. This segment allows Novartis to capture market share in the cost-sensitive healthcare markets. Additionally, strategic partnerships and collaborations with other pharmaceutical companies and research institutions enhance Novartis's capabilities in drug development and commercialization, further contributing to its earnings.

Novartis AG Financial Statement Overview

Summary

Novartis AG portrays a strong financial position with consistent growth in revenue and profitability. The company maintains a balanced leverage structure and generates sufficient cash flow to sustain its operations and growth initiatives. Despite minor fluctuations in total assets, the financial health remains sound, positioning Novartis AG well within the industry.

Income Statement

Novartis AG demonstrates a robust financial performance with consistent revenue and profit growth. The gross profit margin for TTM (Trailing-Twelve-Months) is approximately 75.7%, indicating effective cost management. The net profit margin has improved to 24.2% in the TTM, showcasing enhanced profitability. The revenue growth rate from the previous period is about 2.9%, which is modest but stable. EBIT and EBITDA margins are strong at 29.8% and 41.0% respectively, reflecting operational efficiency.

Balance Sheet

The balance sheet of Novartis AG is healthy, with a debt-to-equity ratio of 0.81, indicating a balanced approach to leverage. The return on equity stands at 33.5% in the TTM, highlighting effective use of shareholders' funds to generate income. The equity ratio is 38.4%, which is reasonable, showing a solid equity base. However, the total assets have slightly decreased, which could be an area of concern if the trend continues.

Cash Flow

The cash flow position of Novartis AG is strong, with a free cash flow growth rate of 16.6% in the TTM, indicating effective cash generation. The operating cash flow to net income ratio is 1.48, suggesting efficient conversion of net income into cash. The free cash flow to net income ratio is 1.25, demonstrating ample free cash flow to support operations and investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	53.22B	51.72B	46.66B	51.83B	52.88B	49.90B
Gross Profit	40.26B	38.90B	34.19B	36.34B	37.01B	34.78B
EBITDA	21.80B	20.71B	18.25B	14.68B	30.91B	17.21B
Net Income	12.86B	11.94B	14.85B	6.96B	24.02B	8.07B
Balance Sheet
Total Assets	99.94B	102.25B	99.94B	117.45B	131.79B	132.06B
Cash, Cash Equivalents and Short-Term Investments	7.20B	13.35B	13.96B	18.93B	28.33B	11.56B
Total Debt	31.27B	31.26B	26.35B	27.96B	31.09B	38.05B
Total Liabilities	61.49B	58.12B	53.20B	58.03B	63.97B	75.39B
Stockholders Equity	38.37B	44.05B	46.67B	59.34B	67.66B	56.60B
Cash Flow
Free Cash Flow	16.09B	13.80B	11.71B	11.56B	12.10B	11.06B
Operating Cash Flow	19.00B	17.62B	14.46B	14.24B	15.07B	13.65B
Investing Cash Flow	-6.28B	-7.51B	5.60B	1.47B	4.21B	-13.18B
Financing Cash Flow	-15.13B	-11.74B	-14.28B	-20.56B	-16.26B	-2.21B

Novartis AG Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 96.18
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:NOVN, the sentiment is Positive. The current price of 96.18 is above the 20-day moving average (MA) of 95.94, above the 50-day MA of 93.55, and above the 200-day MA of 92.25, indicating a bullish trend. The MACD of 0.52 indicates Positive momentum. The RSI at 56.85 is Neutral, neither overbought nor oversold. The STOCH value of 49.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:NOVN.

Novartis AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOVN	81 Outperform	CHF183.05B	16.85		3.64%	6.34%	-13.16%
ROG	74 Outperform	$211.11B	25.19	26.76%	3.71%	3.03%	-27.86%
ALC	73 Outperform	$35.16B	35.04	5.23%	0.32%	3.90%	6.76%
LONN	64 Neutral	CHF38.71B	63.41		0.58%	-2.13%	2.50%
Sector *	51 Neutral	$7.41B	0.36	-61.88%	2.33%	16.99%	1.69%