Novartis AG (NVS)
NYSE:NVS
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Novartis
(NYSE:NVS)
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Rating:67Neutral
Price Target:
$155.00
▲(1.99% Upside)
Action:Downgraded
Date:04/30/26
The score is driven primarily by strong profitability and free-cash-flow generation, offset by the sharp TTM revenue decline and increased leverage. Technicals are currently weak (bearish trend and negative MACD), while valuation is supported by a reasonable P/E and solid dividend yield. Earnings guidance points to a softer 2026 (generic/LOE headwinds and margin dilution) despite positive longer-term growth and margin targets.
Positive Factors
Strong profitability and cash generation
Sustained high margins and very large free cash flow (~$16.4B TTM) provide structural funding for R&D, dividends and buybacks. Strong cash generation increases strategic optionality to invest in launches and offset LOE, supporting long‑term growth even through cyclical troughs.
Negative Factors
Large 2026 generic/LOE headwinds
Management warns 2026 will face the largest generic erosion in company history, with H1 sales and core operating income pressured. This structural LOE event creates a multi‑quarter revenue reset that requires successful new launches and lifecycle actions to fully offset, pressuring margins.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability and cash generation
Sustained high margins and very large free cash flow (~$16.4B TTM) provide structural funding for R&D, dividends and buybacks. Strong cash generation increases strategic optionality to invest in launches and offset LOE, supporting long‑term growth even through cyclical troughs.
Read all positive factors
Novartis (NVS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$270.92B
Dividend Yield2.87%
Average Volume (3M)1.37M
Price to Earnings (P/E)23.1
Beta (1Y)0.34
Revenue Growth5.60%
EPS Growth9.68%
CountryUS
Employees75,883
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)7.02
Shares Outstanding2,034,819,500
10 Day Avg. Volume1,287,523
30 Day Avg. Volume1,372,087
Financial Highlights & Ratios
PEG Ratio0.85
Price to Book (P/B)5.79
Price to Sales (P/S)4.88
P/FCF Ratio15.11
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue5.85
Enterprise Value/Gross Profit7.77
Enterprise Value/Ebitda14.64
Forecast
1Y Price Target
$167.30Price Target Upside10.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)8.67
Revenue Forecast (FY)$56.84B
Novartis 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 pharmaceutical products to wholesalers, pharmacies, hospitals, government agencies, and other healthcare providers worldwide. Its key revenue streams come from (1) sales of innovativ...
Novartis Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 21, 2026
Earnings Call Sentiment Positive
The call conveyed strong multi-product commercial momentum, record profitability and cash generation, and a robust late-stage pipeline with multiple potential catalysts in 2026. Management acknowledged notable near-term headwinds — chiefly mid-2025 generic entries (Entresto, Promacta, Tasigna), noisy Q4 gross-to-net adjustments, the largest GX impact expected in 2026, and some clinical/regulatory timing uncertainties (pelacarsen event rates, remibrutinib monitoring, zigakibart timing). However, the breadth of blockbuster growth across key brands, record margins and cash flow, clear capital allocation, and a defined plan to return to 40%+ core margins by 2029 outweigh the near-term challenges.Positive Updates
Full-Year Sales and Profitability
FY2025 sales up 8% (constant currency); Core operating income up 14% to $21.9 billion; achieved 40.1% core margin (target met 2 years early); core EPS up 17% to $8.98; record free cash flow $17.6 billion (+8%).
Negative Updates
Q4 Sales Softness and Gross-to-Net Noise
Q4 sales declined 1% (impacted by higher gross-to-net adjustments and Entresto LOE); company notes noisy quarter due to U.S. R&D accounting adjustments and out-of-period gross-to-net items (Entresto, Promacta, Tasigna).
Read all updates
Q4-2025 Updates
Positive
Negative
Full-Year Sales and Profitability
FY2025 sales up 8% (constant currency); Core operating income up 14% to $21.9 billion; achieved 40.1% core margin (target met 2 years early); core EPS up 17% to $8.98; record free cash flow $17.6 billion (+8%).
Read all positive updates
Company Guidance
Novartis guided 2026 sales to grow low single‑digit while core operating income is expected to decline low single‑digit (reflecting a 1–2 percentage‑point core‑margin dilution from the Avidity deal); core net financial expenses are expected at about $1.7 billion and the core tax rate around 16.5%. Management said 2026 will be a year of two halves — H1 sales down low single‑digit and H1 core operating income down low double‑digit (Q1 also affected by a ~2% positive gross‑to‑net in the Q1‑2025 base), then H2 sales up mid‑single‑digit and H2 core operating income up mid‑ to high‑single‑digit — producing the full‑year low‑single‑digit top‑line guidance; at late‑January FX levels they expect a ~+2–3 percentage‑point boost to sales and ~+1 percentage‑point to core operating income. They reiterated a 5–6% sales CAGR for 2025–2030 and a return to 40%+ core margin in 2029 (after achieving a 40.1% core margin, $21.9B core operating income, $8.98 core EPS and $17.6B free cash flow in 2025), and announced a proposed dividend of CHF 3.70 (up 6%) plus a new up‑to‑$10B buyback (≈$7.7B remaining).Novartis Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 56.05B | 54.81B | 51.72B | 46.66B | 43.46B | 43.97B |
| Gross Profit | 42.19B | 41.12B | 38.90B | 34.19B | 31.88B | 32.24B |
| EBITDA | 22.40B | 22.99B | 20.71B | 18.25B | 14.68B | 30.91B |
| Net Income | 13.53B | 14.06B | 11.94B | 14.85B | 6.96B | 24.02B |
Balance Sheet | ||||||
| Total Assets | 118.53B | 115.57B | 102.25B | 99.94B | 117.45B | 131.79B |
| Cash, Cash Equivalents and Short-Term Investments | 6.98B | 11.59B | 13.35B | 13.96B | 18.61B | 28.11B |
| Total Debt | 47.00B | 37.03B | 31.26B | 26.35B | 27.91B | 31.02B |
| Total Liabilities | 79.61B | 69.02B | 58.12B | 53.20B | 58.03B | 63.97B |
| Stockholders Equity | 38.51B | 46.13B | 44.05B | 46.67B | 59.34B | 67.66B |
Cash Flow | ||||||
| Free Cash Flow | 16.36B | 17.69B | 13.80B | 11.71B | 12.00B | 12.52B |
| Operating Cash Flow | 19.16B | 19.24B | 17.62B | 14.46B | 14.24B | 15.07B |
| Investing Cash Flow | -16.95B | -4.90B | -7.51B | 5.60B | 1.47B | 4.21B |
| Financing Cash Flow | -2.71B | -14.94B | -11.74B | -14.28B | -20.56B | -16.26B |
Novartis Technical Analysis
Positive
151.97
Price Trends
149.99
Positive
149.70
Positive
137.45
Positive
Market Momentum
-0.26
Negative
54.46
Neutral
72.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVS, the sentiment is Positive. The current price of 151.97 is above the 20-day moving average (MA) of 146.89, above the 50-day MA of 149.99, and above the 200-day MA of 137.45, indicating a bullish trend. The MACD of -0.26 indicates Negative momentum. The RSI at 54.46 is Neutral, neither overbought nor oversold. The STOCH value of 72.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NVS.
Novartis Risk Analysis
Novartis disclosed 26 risk factors in its most recent earnings report. Novartis 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 Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | £212.62B | 24.41 | 22.41% | 1.53% | 4.64% | 26.75% | |
69 Neutral | $103.80B | 15.55 | 14.41% | 4.58% | 11.19% | -0.23% | |
67 Neutral | $270.92B | 23.10 | 31.54% | 2.87% | 5.60% | 9.68% | |
65 Neutral | $278.00B | -17.53 | 17.93% | 3.12% | 2.70% | -48.28% | |
63 Neutral | $144.37B | 14.70 | 8.37% | 6.65% | 1.36% | -5.39% | |
60 Neutral | $369.98B | 137.98 | 68.01% | 2.87% | 9.50% | -13.63% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
NVS
Novartis
150.44
40.32
36.61%
MRK
Merck & Company
114.24
39.00
51.84%
PFE
Pfizer
25.66
3.68
16.73%
SNY
Sanofi
43.55
-7.31
-14.38%
ABBV
AbbVie
213.76
34.74
19.41%
GB:AZN
AstraZeneca
13,880.00
3,640.46
35.55%
Novartis Corporate Events
Novartis Q1 2026: Growth Brands and Pipeline Advance Despite Generic Headwinds
Apr 28, 2026
On April 28, 2026, Novartis reported first-quarter 2026 results showing net sales slipping 5% at constant currencies to USD 13.1 billion, as strong volume growth and surging priority brands were more than offset by U.S. generic erosion and pricing...
Novartis Raises $11 Billion in Multi-Tranche U.S. Bond Offering
Mar 18, 2026
On March 18, 2026, Novartis AG filed a Form 6-K in the United States reporting a major U.S. dollar bond issuance by its financing arm, Novartis Capital Corporation, which is fully and unconditionally guaranteed by the parent company. The transacti...
Novartis Posts Strong 2025 Results and Pipeline Wins as It Enters Major Patent-Expiry Year
Feb 4, 2026
On February 4, 2026, Novartis reported its financial results for the fourth quarter and full year 2025, highlighting robust full-year performance despite mounting US generic competition. For 2025, net sales rose 8% to USD 54.5 billion with core op...
Novartis Files 2025 Annual and Nonfinancial Reports with U.S. SEC
Feb 4, 2026
On February 4, 2026, Novartis AG, acting as a foreign private issuer under the U.S. Securities Exchange Act of 1934, filed a Form 6-K with the U.S. Securities and Exchange Commission to furnish its Annual Report 2025 and its Report on Nonfinancial...
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.