Education
About Us
Working with TipRanks
Follow Us
Novartis Ag (NVS)
NYSE:NVS
Top Page
Novartis
(NYSE:NVS)
Rating:78Outperform
Price Target:
$129.00
▲(1.72% Upside)
Positive Factors
Financial Performance
Increased cash on the balance sheet has led to a modestly higher target price for Novartis.
Product Development
Cosentyx is maintaining its NBRx share despite increased competition and is expected to grow further with the approval of the HS indication and IV formulation.
Trial Results
Kisqali's NATALEE trial results have received positive feedback from physicians, indicating excitement for its use among eBC patients.
Negative Factors
Revenue Expectations
The target price implies modest upside from current levels, suggesting that revenue upside is mostly priced in.
Novartis (NVS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$238.56B
Dividend Yield3.14%
Average Volume (3M)1.89M
Price to Earnings (P/E)18.0
Beta (1Y)0.35
Revenue Growth12.83%
EPS Growth-11.92%
CountryUS
Employees75,883
SectorHealthcare
Sector Strength53
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)2.42
Shares Outstanding2,112,421,900
10 Day Avg. Volume1,363,050
30 Day Avg. Volume1,894,730
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue4.81
Enterprise Value/Gross Profit8.60
Enterprise Value/Ebitda15.80
Forecast
1Y Price Target
$115.01Price Target Upside-9.31% Downside
Rating ConsensusHold
Number of Analyst Covering4
Novartis Business Overview & Revenue Model
Company DescriptionNovartis AG is a global healthcare company based in Switzerland, focused on the research, development, manufacturing, and marketing of innovative pharmaceuticals and generics. The company operates through two main business segments: Innovative Medicines, which includes patented drugs primarily aimed at treating diseases in areas such as oncology, cardiology, immunology, and neuroscience, and Sandoz, which specializes in generic pharmaceuticals and biosimilars. Novartis is committed to addressing the evolving needs of patients worldwide through its extensive portfolio of medications and therapies.
How the Company Makes MoneyNovartis generates revenue primarily through the sale of prescription medicines and pharmaceuticals, with its Innovative Medicines segment contributing the majority of its earnings. Key revenue streams include sales from patented drugs, which often have higher profit margins, as well as revenue from the Sandoz division, which provides a range of generic drugs and biosimilars at lower price points. The company also benefits from strategic partnerships and collaborations with other pharmaceutical companies and research institutions, which can lead to shared development costs and access to new markets. Additionally, Novartis invests heavily in research and development to bring new drugs to market, which can result in significant revenue growth from new product launches.
Novartis Earnings Call Summary
Earnings Call Date:Jul 17, 2025
(Q2-2025)
| % Change Since: 7.14%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook for Novartis, with strong sales and income growth driven by key products like Kisqali, Kesimpta, and Pluvicto. The initiation of a new share buyback program further underscores confidence in future performance. However, challenges such as the slowing growth of Cosentyx and market slowdown in China present hurdles that the company will need to address.Q2-2025 Updates
Positive Updates
Strong Double-Digit Sales Growth
Novartis reported an 11% increase in sales in constant currency for Q2 2025, reflecting robust performance across its portfolio.
Core Operating Income Surge
Core operating income rose by 21% in constant currency, demonstrating strong financial performance and efficiency improvements.
Kisqali's Impressive Growth
Kisqali grew 64% globally and achieved leadership in metastatic breast cancer in the U.S., with a 100% increase in Q2.
Kesimpta's Expanding Market Share
Kesimpta grew 33%, leading in NBRx share in 8 out of 10 major markets outside the U.S.
Pluvicto's Robust Growth
Pluvicto sales increased by 30%, with strong uptake in the community setting and a 40% growth in new patient starts.
Leqvio's Strong Performance
Leqvio grew 61% in the quarter, driven by a 74% growth outside the U.S., particularly in China.
Scemblix's Launch Success
Scemblix experienced a 79% growth and achieved NBRx leadership across all lines of therapy in CML.
Initiation of New Share Buyback Program
Novartis announced a new $10 billion share buyback program, highlighting strong cash flow and shareholder returns.
Negative Updates
Cosentyx Growth Moderation
Cosentyx growth slowed to 6% in Q2 due to competitive pressures and geographic-specific headwinds, particularly in the U.S. and China.
China Market Slowdown
Novartis observed a sector-wide slowdown in pharmaceutical spending in China, impacting high-volume medicines like Cosentyx and Entresto.
Entresto Legal and Generic Challenges
Entresto is facing potential U.S. generic entry in mid-2025, with ongoing litigation against a single generic company.
Company Guidance
During the Novartis Q2 2025 earnings call, the company highlighted its strong financial performance and upgraded its full-year bottom line guidance. Key metrics included an 11% increase in sales and a 21% rise in core operating income, both in constant currency. Notable growth drivers were priority brands, which grew by 30%, excluding Entresto, which itself achieved a 33% growth. Kisqali saw a remarkable 64% growth, achieving leadership in metastatic breast cancer in the U.S. and reaching a 61% NBRx share in early breast cancer. Kesimpta expanded its market share with a 33% growth, driven by the U.S. market. Pluvicto's sales increased by 30%, supported by a significant uptick in patient starts. The company also reported 61% growth for Leqvio, attributing success to strong performance in key markets, including China. Scemblix achieved a 79% growth, and Cosentyx experienced moderated growth at 6%, with the expectation of mid-single-digit growth for the full year. The company's core margin improved by 340 basis points to 42.2%, and core EPS was up 24% to $2.42, with free cash flow increasing by 37% to $6.3 billion. Novartis announced a new $10 billion share buyback program, reflecting its confidence in long-term growth and commitment to balanced capital allocation.Novartis Financial Statement Overview
Summary
Novartis demonstrates solid financial health with strong profitability metrics, efficient cash flow management, and a balanced capital structure. The company is on a stable growth trajectory, though further improvement in revenue growth could enhance future prospects. Leverage is moderate, supporting sustainable long-term operations.Income Statement
Novartis has shown strong profitability with a Gross Profit Margin of 75.4% and a Net Profit Margin of 24.3% for the TTM period. Revenue has grown by 2.21% from the previous year, indicating a steady growth trajectory. The EBIT Margin is robust at 29.8%, and the EBITDA Margin is 41.4%, reflecting efficient operational management.85
Very Positive
Balance Sheet
The company's Debt-to-Equity Ratio stands at 0.82, indicating moderate leverage. The Return on Equity (ROE) is a healthy 33.5%, demonstrating effective use of equity to generate profits. However, the Equity Ratio is 38.4%, suggesting a balanced but slightly conservative capital structure.78
Positive
Cash Flow
Novartis exhibits solid cash flow management with a Free Cash Flow Growth Rate of 7.56%. The Operating Cash Flow to Net Income Ratio is 1.48, and the Free Cash Flow to Net Income Ratio is 1.15, indicating strong cash conversion and sufficient cash generation relative to net income.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 51.72B | 46.66B | 51.83B | 52.88B | 49.90B |
| Gross Profit | 38.90B | 34.19B | 36.34B | 37.01B | 34.78B |
| EBITDA | 20.71B | 18.29B | 14.73B | 17.13B | 15.24B |
| Net Income | 11.94B | 14.85B | 6.96B | 24.02B | 8.07B |
Balance Sheet | |||||
| Total Assets | 102.25B | 99.94B | 117.45B | 131.79B | 132.06B |
| Cash, Cash Equivalents and Short-Term Investments | 13.35B | 13.96B | 18.93B | 28.33B | 11.56B |
| Total Debt | 31.26B | 26.35B | 27.96B | 31.09B | 38.05B |
| Total Liabilities | 58.12B | 53.20B | 58.03B | 63.97B | 75.39B |
| Stockholders Equity | 44.05B | 46.67B | 59.34B | 67.66B | 56.60B |
Cash Flow | |||||
| Free Cash Flow | 13.80B | 11.71B | 11.56B | 12.10B | 11.06B |
| Operating Cash Flow | 17.62B | 14.46B | 14.24B | 15.07B | 13.65B |
| Investing Cash Flow | -7.51B | 5.60B | 1.47B | 4.21B | -13.18B |
| Financing Cash Flow | -11.74B | -14.28B | -20.56B | -16.26B | -2.21B |
Novartis Technical Analysis
Positive
126.82
Price Trends
119.23
Positive
115.21
Positive
108.63
Positive
Market Momentum
2.18
Negative
68.35
Neutral
93.98
Negative
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 126.82 is above the 20-day moving average (MA) of 119.35, above the 50-day MA of 119.23, and above the 200-day MA of 108.63, indicating a bullish trend. The MACD of 2.18 indicates Negative momentum. The RSI at 68.35 is Neutral, neither overbought nor oversold. The STOCH value of 93.98 is Negative, 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
Overall Rating
UnderperformOutperform
Sector (46)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $143.96B | 13.46 | 12.16% | 6.74% | 14.72% | ― | |
81 Outperform | $212.14B | 13.09 | 35.44% | 3.78% | 2.00% | 20.01% | |
79 Outperform | $245.82B | 29.63 | 19.76% | 1.94% | 15.08% | 29.15% | |
78 Outperform | $238.56B | 17.97 | 32.82% | 3.14% | 12.83% | -11.92% | |
76 Outperform | $122.81B | 12.48 | 8.39% | 4.38% | -9.32% | 120.62% | |
67 Neutral | $159.11B | 24.18 | 99.14% | 3.12% | 13.10% | 110.67% | |
46 Neutral | C$209.14M | -0.30 | -24.12% | 3.18% | 19.38% | -2.35% |
* Healthcare Sector Average
Performance Comparison
NVS
Novartis
126.82
11.75
10.21%
AMGN
Amgen
295.76
-24.98
-7.79%
AZN
AstraZeneca
80.46
-4.42
-5.21%
MRK
Merck & Company
86.08
-26.71
-23.68%
PFE
Pfizer
25.74
-1.26
-4.67%
SNY
Sanofi
50.61
-3.86
-7.09%
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.