Novartis AG (NYSE:NVS) stock fell by more than 2.5% after the company announced Q4 results with weaker sales and net income. The numbers were hit by higher generic competition and increased costs.
Novartis is a global pharmaceutical company and has a wide range of prescription and generic drugs in its portfolio.
The net sales for Q4 were down by 4% to $12.69 billion. It also fell short of the estimates by $448 million. The company’s operating income of $1.9 billion in the quarter decreased by 24%, driven by higher restructuring costs.
Net income for the quarter was hit hardest, falling 91% to $1.5 billion. However, this was impacted because of the lack of heavy income from Roche Holding, which was around $14.6 billion in the previous year.
For the full year 2022, the company posted net sales of $50.5 billion and an operating income of $11.6 billion.
On the plus side, the company posted a core EPS of $1.52 per share for Q4, which topped the consensus forecast of $1.42. The EPS gained 9% over the prior year’s quarter.
The company expects its sales to grow by low to mid-single digits and its core operating income by mid-single digits in 2023.
Novartis also proposed a dividend of CHF 3.2 per share for its shareholders, which is 3.2% higher than in 2021.
Is Novartis a Good Share to Buy?
According to TipRanks’ analyst consensus, Novartis stock has a Moderate Buy rating.
This is based on one Buy recommendation from Analyst Graham Parry from Bank of America Securities. He has reiterated his Buy rating after the results yesterday.
The average NVS target price is $102, which shows an upside of 15.6% on the current price level.
