Novartis Ag (NVS)
NYSE:NVS
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Novartis
(NYSE:NVS)
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Rating:77Outperform
Price Target:
$175.00
▲(15.15% Upside)
Action:ReiteratedDate:02/06/26
Score is driven primarily by strong underlying financial quality (high margins and strong free cash flow) and a bullish technical trend. The key constraints are management’s softer 2026 profit outlook amid significant LOE/generic headwinds and a valuation that looks reasonable rather than clearly discounted.
Positive Factors
High margins & strong free cash flow
Sustained high profitability and cash generation underpin durable financial flexibility. Novartis delivered a 40.1% core margin and $17.6B FCF in 2025; FCF tracked net income (~0.78–0.92x 2023–25), supporting continued R&D, dividends and buybacks even through medium-term headwinds.
Negative Factors
Rising leverage
Leverage has increased materially, reducing financial flexibility if earnings weaken. Debt-to-equity climbed to ~0.80 by 2025 and operating cash flow still covers only a modest portion of total debt (coverage <1x though improving), heightening sensitivity to slower growth or higher funding costs.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins & strong free cash flow
Sustained high profitability and cash generation underpin durable financial flexibility. Novartis delivered a 40.1% core margin and $17.6B FCF in 2025; FCF tracked net income (~0.78–0.92x 2023–25), supporting continued R&D, dividends and buybacks even through medium-term headwinds.
Read all positive factors
Novartis (NVS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$261.60B
Dividend Yield2.87%
Average Volume (3M)1.78M
Price to Earnings (P/E)19.0
Beta (1Y)0.36
Revenue Growth5.60%
EPS Growth9.68%
CountryUS
Employees75,883
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)1.99
Shares Outstanding2,034,819,500
10 Day Avg. Volume1,256,289
30 Day Avg. Volume1,779,458
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 Cap1.20
Enterprise Value/Revenue5.59
Enterprise Value/Gross Profit7.38
Enterprise Value/Ebitda13.76
Forecast
1Y Price Target
$169.86Price Target Upside11.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)8.76
Revenue Forecast (FY)$57.00B
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 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 drug...
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
82
Very Positive
Balance Sheet
71
Positive
Cash Flow
78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 54.81B | 51.72B | 46.66B | 43.46B | 43.97B |
| Gross Profit | 41.12B | 38.90B | 34.19B | 31.88B | 32.24B |
| EBITDA | 22.99B | 20.71B | 18.25B | 14.68B | 30.91B |
| Net Income | 14.06B | 11.94B | 14.85B | 6.96B | 24.02B |
Balance Sheet | |||||
| Total Assets | 115.57B | 102.25B | 99.94B | 117.45B | 131.79B |
| Cash, Cash Equivalents and Short-Term Investments | 11.59B | 13.35B | 13.96B | 18.61B | 28.11B |
| Total Debt | 37.03B | 31.26B | 26.35B | 27.91B | 31.02B |
| Total Liabilities | 69.02B | 58.12B | 53.20B | 58.03B | 63.97B |
| Stockholders Equity | 46.13B | 44.05B | 46.67B | 59.34B | 67.66B |
Cash Flow | |||||
| Free Cash Flow | 17.69B | 13.80B | 11.71B | 12.00B | 12.52B |
| Operating Cash Flow | 19.24B | 17.62B | 14.46B | 14.24B | 15.07B |
| Investing Cash Flow | -4.90B | -7.51B | 5.60B | 1.47B | 4.21B |
| Financing Cash Flow | -14.94B | -11.74B | -14.28B | -20.56B | -16.26B |
Novartis Technical Analysis
Positive
151.97
Price Trends
155.49
Negative
145.92
Positive
134.06
Positive
Market Momentum
-0.37
Positive
47.95
Neutral
26.23
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 151.64, below the 50-day MA of 155.49, and above the 200-day MA of 134.06, indicating a neutral trend. The MACD of -0.37 indicates Positive momentum. The RSI at 47.95 is Neutral, neither overbought nor oversold. The STOCH value of 26.23 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $261.60B | 19.02 | 32.80% | 2.87% | 5.60% | 9.68% | |
73 Outperform | £212.34B | 28.13 | 23.00% | 1.53% | 5.28% | 40.95% | |
69 Neutral | $110.06B | 15.55 | 14.71% | 4.58% | 11.19% | -0.23% | |
68 Neutral | $274.03B | 14.46 | 36.19% | 3.12% | 1.49% | 7.89% | |
61 Neutral | $149.38B | 18.21 | 8.67% | 6.65% | -1.65% | -3.74% | |
57 Neutral | $360.63B | 96.26 | -361.58% | 2.87% | 8.57% | -1.34% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
NVS
Novartis
142.94
31.63
28.41%
MRK
Merck & Company
110.95
28.74
34.95%
PFE
Pfizer
26.26
3.50
15.39%
SNY
Sanofi
46.03
-7.22
-13.56%
ABBV
AbbVie
203.89
14.95
7.91%
GB:AZN
AstraZeneca
13,692.00
3,147.77
29.85%
Novartis Corporate Events
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...
Novartis Gains FDA Approval for Groundbreaking SMA Gene Therapy
Nov 25, 2025
On November 24, 2025, Novartis announced that the FDA approved Itvisma, a gene replacement therapy for spinal muscular atrophy (SMA), making it the first of its kind available for children two years and older, teens, and adults. This approval mark...
Novartis Projects Strong Growth with Updated Sales Guidance and Strategic Acquisitions
Nov 20, 2025
On November 20, 2025, Novartis announced an updated sales growth forecast for 2025-2030, projecting a compound annual growth rate (CAGR) of 5-6%. The company has upgraded its peak sales guidance for key products like Kisqali and Scemblix, reflecti...
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.