Novartis (NVS) AI Stock Analysis

• Market Cap: $250.13B
• Dividend Yield: 3.04%
• Average Volume (3M): 1.71M
• Price to Earnings (P/E): 17.8
• Beta (1Y): 0.32
• Revenue Growth: 11.53%
• EPS Growth: -15.21%
• Country: US
• Employees: 75,883
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - General
• EPS (TTM): 2.25
• Shares Outstanding: 2,112,421,900
• 10 Day Avg. Volume: 1,450,077
• 30 Day Avg. Volume: 1,708,469
• PEG Ratio: -0.96
• Price to Book (P/B): 4.46
• Price to Sales (P/S): 3.80
• P/FCF Ratio: 14.22
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 4.85
• Enterprise Value/Gross Profit: 8.45
• Enterprise Value/Ebitda: 14.30
• 1Y Price Target: $129.00
• Price Target Upside: -1.72% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2
• EPS Forecast (FY): 8.93
• Revenue Forecast (FY): $55.46B

• Rating: 73 Outperform
• Price Target: $138.00 ▲(5.13% Upside)

Novartis's strong financial performance and positive earnings call are the primary drivers of its overall score. However, bearish technical indicators and a fair valuation slightly temper the outlook. The company's strategic focus on innovation and expansion supports long-term growth prospects.

Positive Factors

Pipeline Advancements

These advancements strengthen Novartis's product portfolio, enhancing its competitive position and supporting long-term growth.

Cash Generation

Strong cash generation allows for reinvestment and shareholder returns, ensuring financial flexibility and stability.

Strategic Acquisition

This acquisition enhances Novartis's neuroscience pipeline, aligning with its strategy to address unmet needs and drive growth.

Negative Factors

Generic Competition

Increasing generic competition can erode market share and pressure margins, challenging long-term profitability.

Policy Challenges

Policy changes can impact pricing and market dynamics, posing risks to revenue and strategic planning.

Equity Decrease

A decrease in equity can signal potential financial risks, affecting investor confidence and financial health.

Novartis Business Overview & Revenue Model

Company Description

Novartis AG is a global healthcare company based in Switzerland, dedicated to discovering and developing innovative medicines to improve and extend people's lives. The company operates primarily through two business segments: Innovative Medicines and Sandoz, its generic pharmaceuticals and biosimilars division. Novartis's core products include patented pharmaceuticals across various therapeutic areas such as oncology, cardiology, immunology, dermatology, and neuroscience, along with a robust pipeline of new therapies and treatments.

How the Company Makes Money

Novartis generates revenue primarily through the sale of patented prescription medications, which are marketed globally. The Innovative Medicines segment contributes the majority of the company's revenue, encompassing sales from both patented drugs and recently launched therapies. The Sandoz division provides a secondary revenue stream through the sale of generic medications and biosimilars, which allow for cost-effective alternatives to branded drugs. Additionally, Novartis engages in partnerships and collaborations with other pharmaceutical companies and research institutions, which can lead to co-development agreements and licensing deals that bolster its earnings. The company also invests in research and development to drive innovation, aiming to bring new products to market that can significantly enhance its revenue potential.

Novartis Financial Statement Overview

Summary

Novartis demonstrates strong financial performance with consistent revenue growth and robust profitability. The balance sheet is stable with manageable leverage, and cash flow statements highlight excellent cash generation capabilities. Despite minor fluctuations in equity, the overall financial health is solid.

Income Statement

Novartis has shown strong performance with a consistent increase in total revenue over time. The TTM (Trailing-Twelve-Months) gross profit margin stands at 55.95%, and the net profit margin is 17.60%, both indicating solid profitability. Revenue growth is evident with a 5.62% increase from the previous annual report. The EBIT margin is impressive at 30.32%, showing efficient operations. Overall, the company exhibits healthy revenue growth and profitability.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.78, indicating manageable leverage. The equity ratio is at 40.20%, suggesting a strong equity base. Return on Equity (ROE) is robust at 22.90%, showing effective use of equity to generate profits. However, a slight decrease in stockholders' equity over time could pose a potential risk.

Cash Flow

The cash flow statement indicates strong cash generation with a free cash flow growth rate of 21.73% in the TTM. The operating cash flow to net income ratio is 2.16, and the free cash flow to net income ratio is 1.75, both suggesting excellent cash conversion efficiency. This highlights the company's ability to generate cash from operations and maintain healthy liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	56.02B	51.72B	46.66B	43.46B	43.97B	49.90B
Gross Profit	32.14B	38.90B	34.19B	31.88B	32.24B	34.78B
EBITDA	18.99B	20.71B	18.25B	14.68B	30.91B	17.21B
Net Income	11.68B	11.94B	14.85B	6.96B	24.02B	8.07B
Balance Sheet
Total Assets	107.29B	102.25B	99.94B	117.45B	131.79B	132.06B
Cash, Cash Equivalents and Short-Term Investments	9.75B	13.35B	13.96B	18.93B	28.33B	11.56B
Total Debt	30.12B	31.26B	26.35B	27.96B	31.09B	38.05B
Total Liabilities	62.54B	58.12B	53.20B	58.03B	63.97B	75.39B
Stockholders Equity	44.33B	44.05B	46.67B	59.34B	67.66B	56.60B
Cash Flow
Free Cash Flow	11.32B	13.80B	11.71B	11.56B	12.10B	11.06B
Operating Cash Flow	14.50B	17.62B	14.46B	14.24B	15.07B	13.65B
Investing Cash Flow	582.62M	-7.51B	5.60B	1.47B	4.21B	-13.18B
Financing Cash Flow	-10.53B	-11.74B	-14.28B	-20.56B	-16.26B	-2.21B

Novartis Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 131.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 131.26 is above the 20-day moving average (MA) of 127.89, above the 50-day MA of 127.56, and above the 200-day MA of 117.33, indicating a bullish trend. The MACD of 0.67 indicates Negative momentum. The RSI at 60.62 is Neutral, neither overbought nor oversold. The STOCH value of 85.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NVS.

Novartis Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRK	78 Outperform	$230.63B	12.29	39.51%	3.49%	1.59%	58.02%
SNY	76 Outperform	$127.00B	12.96	8.39%	4.24%	-9.32%	120.62%
AZN	75 Outperform	$275.87B	29.36	21.73%	1.76%	12.95%	44.28%
NVS	73 Outperform	$250.13B	17.78	32.93%	3.04%	11.53%	-15.21%
PFE	68 Neutral	$142.48B	14.61	10.59%	6.86%	4.44%	128.96%
ABBV	62 Neutral	$410.67B	175.33	138.53%	3.01%	7.40%	-53.78%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Novartis Corporate Events

Novartis Issues $6 Billion in Debt Securities to Bolster Financial Strategy

On November 5, 2025, Novartis AG announced the issuance of several debt securities through its subsidiary, Novartis Capital Corporation, amounting to a total of $6 billion. These securities include Floating Rate Notes and various fixed-rate notes with maturities ranging from 2028 to 2055. The move is part of Novartis’s strategy to secure funding for its operations and investments, potentially impacting its financial flexibility and market positioning.

Novartis Reports Strong Q3 2025 Results with Key Approvals

In its Q3 2025 financial results, Novartis reported a 7% increase in net sales and core operating income, driven by strong performance of key brands like Kisqali and Kesimpta. The company achieved significant milestones, including FDA approval for Rhapsido and positive Phase III results for ianalumab, which are expected to support long-term growth. Despite challenges from generic competition, Novartis maintained stable core operating income margins and reaffirmed its full-year guidance, projecting high single-digit sales growth and low-teens growth in core operating income.

Novartis to Acquire Avidity Biosciences, Enhancing Neuroscience Pipeline

On October 26, 2025, Novartis announced its agreement to acquire Avidity Biosciences, a biopharmaceutical company specializing in RNA therapeutics for genetic neuromuscular diseases. This acquisition aims to enhance Novartis’s neuroscience pipeline with Avidity’s late-stage programs and innovative Antibody Oligonucleotide Conjugates (AOCs™) platform. The transaction, valued at approximately USD 12 billion, is expected to boost Novartis’s sales growth and create substantial shareholder returns. The acquisition aligns with Novartis’s long-term strategy to address high unmet needs in genetically defined diseases and is expected to close in the first half of 2026, pending regulatory approvals and other conditions.

Novartis Gains FDA Approval for Rhapsido® in CSU Treatment

On September 30, 2025, Novartis announced that its drug Rhapsido® (remibrutinib) received FDA approval as the first oral Bruton’s tyrosine kinase inhibitor (BTKi) for treating chronic spontaneous urticaria (CSU) in adults who remain symptomatic despite antihistamine treatment. This approval marks a significant advancement in CSU care, offering a new oral treatment option that provides fast relief without the need for injections or lab monitoring. The approval is based on positive results from Phase III clinical trials, and it expands Novartis’s immunology portfolio, potentially impacting the lives of 1.7 million people in the US living with CSU.