Novartis (NVS) AI Stock Analysis

• Market Cap: $265.92B
• Dividend Yield: 2.87%
• Average Volume (3M): 1.71M
• Price to Earnings (P/E): 18.8
• Beta (1Y): 0.33
• 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: 1,744,366
• 30 Day Avg. Volume: 1,708,055
• PEG Ratio: -0.96
• Price to Book (P/B): 4.46
• Price to Sales (P/S): 3.80
• P/FCF Ratio: 14.23
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 4.82
• Enterprise Value/Gross Profit: 6.32
• Enterprise Value/Ebitda: 11.84
• 1Y Price Target: $131.67
• Price Target Upside: -5.19% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 8.93
• Revenue Forecast (FY): $55.40B

• Rating: 80 Outperform
• Price Target: $151.00 ▲(8.73% Upside)

Novartis presents a strong investment case with robust financial performance and positive earnings call highlights. The technical analysis supports a positive trend, though valuation metrics are moderate. The company's strategic focus on innovation and expansion, despite some market challenges, underpins its growth potential.

Positive Factors

Revenue Growth

The consistent sales growth indicates strong market demand and effective product positioning, supporting long-term revenue expansion.

Pipeline Advancements

These advancements enhance Novartis's competitive edge in innovative treatments, potentially driving future growth and market leadership.

Cash Flow Generation

Strong cash flow supports reinvestment in growth initiatives and shareholder returns, enhancing financial stability and strategic flexibility.

Negative Factors

Generic Competition

Rising generic competition can erode market share and pricing power, impacting long-term profitability and revenue growth.

Debt Issuance

Increased debt levels may constrain financial flexibility and elevate interest obligations, affecting long-term financial health.

Policy Challenges

Regulatory challenges in the U.S. could impact pricing and market access, posing risks to revenue and strategic initiatives.

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 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 robust profitability, efficient operations, and solid cash flow generation. The company has improved revenue growth and maintained healthy margins, while keeping leverage manageable.

Income Statement

Novartis demonstrates strong profitability with a consistent increase in gross profit margin, reaching 76.2% in TTM. The net profit margin improved to 25.5% in TTM, indicating efficient cost management. Revenue growth is positive at 2.1% in TTM, recovering from previous declines. The EBIT and EBITDA margins are robust at 31.1% and 40.5% respectively, reflecting operational efficiency.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 0.72 in TTM, suggesting manageable leverage. Return on equity is strong at 34.1%, indicating effective use of equity to generate profits. The equity ratio stands at 41.3%, reflecting a solid capital structure.

Cash Flow

Novartis exhibits healthy cash flow metrics with a significant free cash flow growth rate of 150.5% in TTM. The operating cash flow to net income ratio is 0.66, and the free cash flow to net income ratio is 0.87, indicating strong cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	56.37B	51.72B	46.66B	43.46B	43.97B	49.90B
Gross Profit	42.96B	38.90B	34.19B	31.88B	32.24B	34.78B
EBITDA	22.94B	20.71B	18.25B	14.68B	30.91B	17.21B
Net Income	14.39B	11.94B	14.85B	6.96B	24.02B	8.07B
Balance Sheet
Total Assets	107.29B	102.25B	99.94B	117.45B	131.79B	132.19B
Cash, Cash Equivalents and Short-Term Investments	9.75B	13.35B	13.96B	18.61B	28.11B	11.56B
Total Debt	32.02B	31.26B	26.35B	27.91B	31.02B	37.85B
Total Liabilities	62.54B	58.12B	53.20B	58.03B	63.97B	75.52B
Stockholders Equity	44.33B	44.05B	46.67B	59.34B	67.66B	56.60B
Cash Flow
Free Cash Flow	17.06B	13.80B	11.71B	12.00B	12.52B	11.06B
Operating Cash Flow	21.07B	17.62B	14.46B	14.24B	15.07B	13.65B
Investing Cash Flow	-5.81B	-7.51B	5.60B	1.47B	4.21B	-13.18B
Financing Cash Flow	-19.55B	-11.74B	-14.28B	-20.56B	-16.26B	-2.21B

Novartis Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 138.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 138.88 is above the 20-day moving average (MA) of 133.46, above the 50-day MA of 130.29, and above the 200-day MA of 120.89, indicating a bullish trend. The MACD of 2.31 indicates Negative momentum. The RSI at 70.92 is Negative, neither overbought nor oversold. The STOCH value of 88.17 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	80 Outperform	$264.21B	14.08	39.51%	3.12%	1.59%	58.02%
NVS	80 Outperform	$265.92B	18.81	32.93%	2.87%	11.53%	-15.21%
AZN	79 Outperform	$286.45B	30.46	21.73%	1.70%	12.95%	44.28%
SNY	75 Outperform	$116.52B	12.02	8.39%	4.58%	-9.32%	120.62%
PFE	74 Outperform	$142.31B	14.59	10.59%	6.65%	4.44%	128.96%
ABBV	66 Neutral	$406.30B	173.46	138.53%	2.87%	7.40%	-53.78%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Novartis Corporate Events

Novartis Gains FDA Approval for Groundbreaking SMA Gene Therapy

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 marks a significant advancement in SMA treatment, offering a one-time dose that replaces the SMN1 gene, potentially reducing the need for chronic treatment. The therapy demonstrated improved motor function and stabilization in clinical trials, with a consistent safety profile. This development is expected to transform the care landscape for SMA and expand access to treatment for older patients, addressing unmet needs in the community.

Novartis Projects Strong Growth with Updated Sales Guidance and Strategic Acquisitions

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, reflecting strong momentum from in-market growth drivers and upcoming product launches. Novartis is entering a catalyst-rich period with over 15 potential submission-enabling readouts expected in the next two years, supported by a pipeline of more than 30 potential high-value medicines. The company’s strategic acquisitions, including the planned acquisition of Avidity Biosciences, are expected to bolster its pipeline and strengthen its market position, ensuring continued growth beyond 2030.

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.