Novartis (NVS) AI Stock Analysis

• Market Cap: $217.49B
• Dividend Yield: 2.98%
• Average Volume (3M): 2.41M
• Price to Earnings (P/E): 17.8
• Beta (1Y): 0.36
• Revenue Growth: 6.30%
• EPS Growth: -13.28%
• Country: US
• Employees: 75,883
• Sector: Healthcare
• Sector Strength: 50
• Industry: Drug Manufacturers - General
• EPS (TTM): 2.28
• Shares Outstanding: 2,112,421,900
• 10 Day Avg. Volume: 2,112,054
• 30 Day Avg. Volume: 2,408,402
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 6.29
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $107.00
• Price Target Upside: -1.56% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

Novartis receives a robust overall stock score of 79, driven by strong financial performance and positive earnings call outcomes. While technical analysis and valuation are supportive, challenges in product rollout and European pricing slightly temper the outlook. The company's stable growth, innovation capacity, and strategic guidance upgrades position it well for future success.

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 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 healthcare providers. It also provides ophthalmology, neuroscience, immunology, hepatology, dermatology, respiratory, cardiovascular, renal, and metabolism medicine products. The Sandoz segment develops, manufactures, and markets finished dosage form medicines; active ingredients and finished dosage forms of small molecule pharmaceuticals to third parties; and retail generics and anti-infectives. It also provides active pharmaceutical ingredients and intermediates primarily antibiotics; protein- or other biotechnology-based products, including biosimilars; and biotechnology manufacturing services. Novartis AG has a license and collaboration agreement with Alnylam Pharmaceuticals to develop, manufacture, and commercialize inclisiran; and a clinical collaboration with Kura Oncology, Inc. to evaluate the combination of Tipifarnib and Alpelisib in patients with head and neck squamous cell carcinoma. The company was incorporated in 1996 and is headquartered in Basel, Switzerland.

How the Company Makes Money

Novartis generates revenue through multiple streams, primarily from the sale of its branded pharmaceuticals and generic and biosimilar products. The company operates through two major divisions: Innovative Medicines and Sandoz. The Innovative Medicines division, which includes patented prescription medicines, is the primary revenue driver, contributing a significant portion of Novartis's income by focusing on high-value therapeutics in areas such as oncology, cardiovascular health, and neuroscience. Sandoz, which provides generic and biosimilar medicines, offers a cost-effective alternative to branded drugs, adding to the company's revenue by catering to a broader market segment. Furthermore, Novartis invests heavily in research and development to foster innovation and bring new drugs to market, thereby sustaining its competitive advantage and revenue growth. Strategic partnerships and collaborations with other healthcare entities and technology companies also play a role in expanding the company's reach and enhancing its product offerings.

Novartis Financial Statement Overview

Summary

Novartis demonstrates solid financial health with strong profitability metrics, including a Gross Profit Margin of 75.4% and a Net Profit Margin of 24.3%. Revenue growth is steady at 2.21%, with efficient cash flow management and moderate leverage. These factors contribute to a stable growth trajectory.

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.

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.

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.

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
	EBIT
14.54B	9.77B	9.20B	26.95B	10.15B
	EBITDA
20.71B	18.29B	14.73B	17.13B	15.24B
	Net Income Common Stockholders
11.94B	14.85B	6.96B	24.02B	8.07B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
13.35B	13.96B	18.93B	28.33B	11.56B
	Total Assets
102.25B	99.94B	117.45B	131.79B	132.06B
	Total Debt
31.26B	26.35B	27.96B	31.09B	38.05B
	Net Debt
19.80B	12.96B	20.45B	18.69B	28.39B
	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

• Technical Analysis Sentiment: Neutral
• Last Price: 108.70
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVS, the sentiment is Neutral. The current price of 108.7 is below the 20-day moving average (MA) of 111.10, below the 50-day MA of 109.99, and above the 200-day MA of 106.51, indicating a neutral trend. The MACD of 0.53 indicates Positive momentum. The RSI at 45.19 is Neutral, neither overbought nor oversold. The STOCH value of 12.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NVS.

Novartis Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVS	79 Outperform	$217.49B	17.77	32.95%	2.98%	6.30%	-13.28%
AZN	78 Outperform	$221.49B	28.75	19.81%	2.26%	15.48%	22.70%
MRK	76 Outperform	$198.47B	12.06	39.31%	4.07%	4.40%	654.93%
AMGN	70 Outperform	$145.42B	25.56	105.67%	3.36%	15.59%	56.99%
SNY	70 Outperform	$132.49B	22.72	7.34%	2.83%	-4.57%	2.96%
PFE	66 Neutral	$130.08B	17.30	8.62%	7.41%	13.38%	―
Sector *	52 Neutral	$5.17B	3.59	-42.19%	2.82%	15.05%	-0.04%