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Novartis AG
(NOVN)
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Rating:71Outperform
Price Target:
CHF143.00
▲(11.42% Upside)
Action:Reiterated
Date:10/29/26
The score is driven primarily by solid—but mixed—fundamentals: strong operating profitability and revenue acceleration are tempered by higher leverage and weakening cash-flow momentum. Technicals add support with a clear uptrend and positive momentum. Valuation is a headwind due to a ~30 P/E despite a ~2.86% yield. Earnings call takeaways are net positive on upgraded guidance and strong brand execution, but notable clinical setbacks and expected margin pressure cap the score.
Positive Factors
Priority-brand growth
Rapid growth across multiple priority brands demonstrates meaningful commercial momentum and replacement power as older products face erosion. Broad adoption across oncology, immunology, neuroscience and cardiovascular care supports a diversified revenue base and strengthens medium-term growth durability.
Negative Factors
Higher leverage
The substantial increase in debt and debt-to-equity has reduced the balance-sheet cushion and financial flexibility. Higher leverage can constrain capital allocation and make the company more exposed to financing costs or operating weakness while it continues investing in its pipeline.
Read all positive and negative factors
Positive Factors
Negative Factors
Priority-brand growth
Rapid growth across multiple priority brands demonstrates meaningful commercial momentum and replacement power as older products face erosion. Broad adoption across oncology, immunology, neuroscience and cardiovascular care supports a diversified revenue base and strengthens medium-term growth durability.
Read all positive factors
Novartis AG (NOVN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF236.54B
Dividend Yield2.86%
Average Volume (3M)3.32M
Price to Earnings (P/E)30.0
Beta (1Y)1.17
Revenue Growth-4.48%
EPS Growth-33.14%
CountryCH
Employees75,267
SectorGeneral
Sector StrengthN/A
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)5.20
Shares Outstanding2,034,819,500
10 Day Avg. Volume3,572,457
30 Day Avg. Volume3,316,331
Financial Highlights & Ratios
PEG Ratio0.66
Price to Book (P/B)5.81
Price to Sales (P/S)4.69
P/FCF Ratio14.54
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF125.93Price Target Upside-1.88% Downside
Rating ConsensusHold
Number of Analyst Covering14
EPS Forecast (FY)8.82
Revenue Forecast (FY)CHF57.21B
Novartis AG Business Overview & Revenue Model
Company Description
Novartis AG researches, develops, manufactures, distributes, markets, and sells pharmaceutical medicines in Switzerland and internationally. The company offers Entresto, an angiotensin receptorneprilysin inhibitor to treat symptomatic chronic hear...
How the Company Makes Money
Novartis makes money primarily by selling patented prescription medicines to customers such as wholesalers, pharmacies, hospitals, governments, and other healthcare providers across global markets. Its largest revenue stream is product sales: once...
Novartis AG Earnings Call Summary
Earnings Call Date:Oct 27, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Feb 03, 2027
Earnings Call Sentiment Positive
The call was broadly positive, with strong Q3 sales growth, core margin expansion, robust performance from priority brands, multiple pipeline and regulatory milestones, and an upgrade to full-year core operating income guidance. These positives were partly offset by major clinical setbacks, including the delgociptacine primary-endpoint miss and $1.9 billion impairment, the pelicarcen phase 3 failure, first-half generic erosion, expected Q4 margin pressure, and delays or uncertainty across several programs.Positive Updates
Q3 Sales Growth, Margin Expansion, and Guidance Upgrade
Q3 net sales grew 4% in constant currencies to $14.5 billion, core operating income increased 10% to $6 billion, core operating income margin expanded by 2 percentage points to 41.6%, and core EPS rose 8% to $2.46. The company upgraded full-year 2026 core operating income guidance from a low single digit decline to in line to growing low single digit, while maintaining low single digit net sales growth guidance.
Negative Updates
Reported Operating Income and Net Income Declined Sharply
Reported Q3 operating income was $1.8 billion, down 61%, mainly due to higher R&D expenses, including a $1.9 billion partial impairment of delgociptacine. Net income was $1.2 billion, down 71%, mainly due to lower operating income and higher interest income. Q3 free cash flow was $5.1 billion, below the prior year.
Read all updates
Q3-2026 Updates
Positive
Negative
Q3 Sales Growth, Margin Expansion, and Guidance Upgrade
Q3 net sales grew 4% in constant currencies to $14.5 billion, core operating income increased 10% to $6 billion, core operating income margin expanded by 2 percentage points to 41.6%, and core EPS rose 8% to $2.46. The company upgraded full-year 2026 core operating income guidance from a low single digit decline to in line to growing low single digit, while maintaining low single digit net sales growth guidance.
Read all positive updates
Company Guidance
For full year 2026, Novartis expects net sales to grow low single digit, core operating income to be in line to growing low single digit, core net financial results to be an expense of $1.7 billion, and the core tax rate to be around 16.5%; for H2, net sales are expected to grow mid to high single digit and core operating income high single to low double digit, while Q4 core margin is expected to decline versus Q3. The company reaffirmed 5% to 6% constant currency sales guidance for 25 to 30 and its mid single digit constant currency long term growth outlook, remains committed to 40% margin by 2029, and expects to complete the $10 billion share buyback program by end of 27. If exchange rates remain at late October levels, it expects positive 1 percentage point impact on full year net sales and positive 1 percentage point impact on full year core operating income; if these rates also prevail in 2027, it expects a negative 1 percentage point impact on top line and no impact on core operating income. Peak-sales guidance includes Rhapsido in CSU and CIndU combined to over $4 billion, remibrutinib at $4 billion for CSU and CIndU and $4 billion for the current MS readout, equaling $8 billion-plus, Leqvio as a $4 billion plus medicine, Fabhalta at $3 billion, and Kisqali at $10 billion.Novartis AG Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
64
Positive
Cash Flow
62
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 54.96B | 57.13B | 51.72B | 46.66B | 43.46B | 43.97B |
| Gross Profit | 40.83B | 42.86B | 38.90B | 34.19B | 31.88B | 32.24B |
| EBITDA | 22.47B | 23.96B | 20.71B | 18.25B | 14.68B | 30.91B |
| Net Income | 9.93B | 14.65B | 11.94B | 14.85B | 6.96B | 24.02B |
Balance Sheet | ||||||
| Total Assets | 117.67B | 115.49B | 102.25B | 99.94B | 117.45B | 131.79B |
| Cash, Cash Equivalents and Short-Term Investments | 9.02B | 11.58B | 13.35B | 13.96B | 18.61B | 28.11B |
| Total Debt | 48.53B | 37.01B | 31.26B | 26.35B | 27.91B | 31.02B |
| Total Liabilities | 79.94B | 68.97B | 58.12B | 53.20B | 58.03B | 63.97B |
| Stockholders Equity | 37.40B | 46.10B | 44.05B | 46.67B | 59.34B | 67.66B |
Cash Flow | ||||||
| Free Cash Flow | 15.34B | 18.43B | 13.80B | 11.71B | 11.56B | 12.10B |
| Operating Cash Flow | 17.01B | 20.05B | 17.62B | 14.46B | 14.24B | 15.07B |
| Investing Cash Flow | -18.60B | -5.11B | -7.51B | 5.60B | 1.47B | 4.21B |
| Financing Cash Flow | 1.12B | -15.57B | -11.74B | -14.28B | -20.56B | -16.26B |
Novartis AG Technical Analysis
Positive
128.34
Price Trends
121.71
Positive
123.19
Positive
120.57
Positive
Market Momentum
2.47
Negative
66.24
Neutral
73.97
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:NOVN, the sentiment is Positive. The current price of 128.34 is above the 20-day moving average (MA) of 122.87, above the 50-day MA of 121.71, and above the 200-day MA of 120.57, indicating a bullish trend. The MACD of 2.47 indicates Negative momentum. The RSI at 66.24 is Neutral, neither overbought nor oversold. The STOCH value of 73.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:NOVN.
Novartis AG Risk Analysis
Novartis AG disclosed 26 risk factors in its most recent earnings report. Novartis AG 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 AG Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | CHF317.95B | 25.96 | 37.12% | 2.46% | -1.06% | 30.86% | |
73 Outperform | CHF903.17M | 17.23 | ― | 8.99% | 4.74% | -28.96% | |
71 Outperform | CHF236.54B | 29.96 | ― | 2.86% | -4.48% | -33.14% | |
66 Neutral | CHF43.19B | 61.02 | ― | 0.19% | 15.78% | 111.61% | |
62 Neutral | CHF35.15B | 64.64 | 7.04% | 1.00% | 0.81% | 165.32% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
45 Neutral | CHF1.23B | -3.51 | ― | 86.75% | -8.06% | -87.00% |
* General Sector Average
CH:NOVN
Novartis AG
132.30
36.34
37.87%
CH:ROP
Roche Holding AG
401.70
147.77
58.19%
CH:BSLN
Basilea Pharmaceutica
71.50
25.25
54.59%
CH:IDIA
Idorsia Ltd
4.58
1.26
38.01%
CH:SDZ
Sandoz Group Ltd
83.38
31.12
59.54%
CH:GALD
Galderma Group AG
189.70
42.52
28.89%
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.