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Novartis
(NYSE:NVS)
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Rating:67Neutral
Price Target:
$149.00
â–¼(-6.86% Downside)
Action:Reiterated
Date:09/09/26
The score is driven primarily by solid fundamentals (high margins and robust free cash flow) and a constructive earnings-call outlook with reaffirmed guidance and strong product drivers. These positives are tempered by technical weakness (below major moving averages and negative MACD) and fundamental risk signals from the sharp TTM revenue decline and increased leverage.
Positive Factors
Strong profitability and cash generation
High margins indicate substantial economic value from Novartis’s prescription-medicine portfolio, while robust free cash flow supports research investment, acquisitions, dividends, and buybacks. Cash flow close to earnings also suggests that reported profitability is generally supported by cash generation.
Negative Factors
Generic erosion is pressuring sales and earnings
Generic competition is reducing the contribution from established products, creating a continuing headwind to revenue and operating income. This raises the burden on newer launches to replace lost sales and may keep margins under pressure as the portfolio mix changes.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability and cash generation
High margins indicate substantial economic value from Novartis’s prescription-medicine portfolio, while robust free cash flow supports research investment, acquisitions, dividends, and buybacks. Cash flow close to earnings also suggests that reported profitability is generally supported by cash generation.
Read all positive factors
Novartis (NVS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$262.78B
Dividend Yield3.3%
Average Volume (3M)2.31M
Price to Earnings (P/E)21.8
Beta (1Y)0.29
Revenue Growth2.33%
EPS Growth-4.08%
CountryUS
Employees75,267
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)6.66
Shares Outstanding2,034,819,500
10 Day Avg. Volume1,835,858
30 Day Avg. Volume2,314,177
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 Cap1.30
Enterprise Value/Revenue6.14
Enterprise Value/Gross Profit8.25
Enterprise Value/Ebitda15.35
Forecast
1Y Price Target
$154.67Price Target Upside-3.32% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)8.83
Revenue Forecast (FY)$57.27B
Novartis Business Overview & Revenue Model
Company Description
Novartis AG is a holding company, which engages in the business of developing, manufacturing, and marketing healthcare products. Its product portfolio is heavily focused on innovative prescription medicines, especially oncology, immunology, neuros...
How the Company Makes Money
Novartis makes money primarily by selling patented prescription drugs and related therapies worldwide. Its core revenue model is to (1) invest in R&D to discover and clinically validate new medicines, (2) secure regulatory approvals in individual ...
Novartis Earnings Call Summary
Earnings Call Date:Jul 21, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 27, 2026
Earnings Call Sentiment Positive
The call presented a largely positive commercial and pipeline picture: multiple priority brands delivered high double-digit growth, Q2 returned to net sales growth, important regulatory and biomarker milestones were achieved, and management reaffirmed full-year guidance while outlining a busy H2 of pivotal readouts. Offsetting risks include H1 generic erosion and margin pressure (partly acquisition-related), temporary phasing effects that favor Q2, and several high-impact clinical readouts and regional competitive pressures that remain uncertain. On balance, the upside from strong product momentum, cash generation and pipeline progress outweighs the near-term headwinds.Positive Updates
Return to Revenue Growth in Q2
Net sales grew 1% in constant currencies to $14.4 billion in Q2 2026, with core operating income flat at $5.9 billion. The company reaffirmed full-year 2026 guidance (net sales: low single-digit growth; core operating income: low single-digit decline).
Negative Updates
First-Half Generic Erosion and H1 Declines
Significant U.S. generic erosion impacted results in H1: H1 net sales declined 2% and core operating income declined 7% year-to-date, with core operating margin down 2.3 percentage points to 39.4%.
Read all updates
Q2-2026 Updates
Positive
Negative
Return to Revenue Growth in Q2
Net sales grew 1% in constant currencies to $14.4 billion in Q2 2026, with core operating income flat at $5.9 billion. The company reaffirmed full-year 2026 guidance (net sales: low single-digit growth; core operating income: low single-digit decline).
Read all positive updates
Company Guidance
Novartis reaffirmed its full‑year 2026 guidance, reiterating net sales growth of low single digits and a low‑single‑digit decline in core operating income, with core net financial results of ~ $1.7 billion and a core tax rate of ~16.5%; the company expects H2 net sales to grow mid‑single digits and H2 core operating income to grow mid‑ to high‑single digits (noting about $800 million of prior‑year U.S. Entresto sales in the Q3 base). In Q2 the group reported net sales of $14.4 billion (up 1% in constant currencies) and flat core operating income at $5.9 billion with a 41.2% core operating margin (‑70 bps); H1 net sales were down 2%, H1 core operating income down 7% and H1 core operating margin was 39.4% (‑230 bps). Free cash flow was $5.6 billion in Q2 and $8.9 billion for H1; capital returns in H1 included $9.1 billion of dividends and $2.1 billion of share repurchases (with $5.6 billion remaining in the buyback program to be completed by end‑2027). Management noted Q2 was aided by one‑time phasing that boosted net sales by ~1 percentage point and core operating income by ~5 percentage points, and that if FX stays at mid‑July levels it would add ~1 percentage point to full‑year net sales and ~1 percentage point to core operating income.Novartis Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
63
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 55.63B | 54.81B | 51.72B | 46.66B | 43.46B | 43.97B |
| Gross Profit | 41.41B | 41.12B | 38.90B | 34.19B | 31.88B | 32.24B |
| EBITDA | 22.26B | 22.99B | 20.71B | 18.25B | 14.68B | 30.91B |
| Net Income | 12.76B | 14.06B | 11.94B | 14.85B | 6.96B | 24.02B |
Balance Sheet | ||||||
| Total Assets | 122.03B | 115.57B | 102.25B | 99.94B | 117.45B | 131.79B |
| Cash, Cash Equivalents and Short-Term Investments | 7.69B | 11.59B | 13.35B | 13.96B | 18.61B | 28.11B |
| Total Debt | 49.01B | 37.03B | 31.26B | 26.35B | 27.91B | 31.02B |
| Total Liabilities | 80.09B | 69.02B | 58.12B | 53.20B | 58.03B | 63.97B |
| Stockholders Equity | 41.54B | 46.13B | 44.05B | 46.67B | 59.34B | 67.66B |
Cash Flow | ||||||
| Free Cash Flow | 15.82B | 17.69B | 13.80B | 11.71B | 12.00B | 12.52B |
| Operating Cash Flow | 18.39B | 19.24B | 17.62B | 14.46B | 14.24B | 15.07B |
| Investing Cash Flow | -17.80B | -4.90B | -7.51B | 5.60B | 1.47B | 4.21B |
| Financing Cash Flow | 472.20M | -14.94B | -11.74B | -14.28B | -20.56B | -16.26B |
Novartis Technical Analysis
Neutral
159.98
Price Trends
149.29
Negative
150.77
Negative
150.09
Negative
Market Momentum
-1.81
Negative
46.27
Neutral
39.94
Neutral
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 159.98 is above the 20-day moving average (MA) of 141.70, above the 50-day MA of 149.29, and above the 200-day MA of 150.09, indicating a neutral trend. The MACD of -1.81 indicates Negative momentum. The RSI at 46.27 is Neutral, neither overbought nor oversold. The STOCH value of 39.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
86 Outperform | $630.04B | 30.09 | 25.73% | 2.02% | 8.07% | -7.21% | |
76 Outperform | $1.11T | 39.45 | 92.58% | 0.57% | 49.58% | 95.08% | |
76 Outperform | $96.12B | 21.87 | 5.52% | 6.04% | 23.68% | -30.90% | |
67 Neutral | $262.78B | 21.78 | 29.64% | 3.30% | 2.33% | -4.08% | |
66 Neutral | $161.19B | 37.25 | 4.89% | 6.08% | -0.21% | -59.71% | |
62 Neutral | $359.22B | 116.04 | 6.60% | 2.33% | 4.51% | -80.62% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
NVS
Novartis
143.75
17.11
13.51%
LLY
Eli Lilly & Co
1,179.27
365.01
44.83%
JNJ
Johnson & Johnson
261.44
74.75
40.04%
MRK
Merck & Company
145.60
62.35
74.88%
PFE
Pfizer
28.28
5.17
22.38%
SNY
Sanofi
40.07
-6.86
-14.61%
Novartis Corporate Events
Novartis DM1 Trial Setback Offset by Progress in Neuromuscular Pipeline
Sep 8, 2026
On September 8, 2026, Novartis reported that its global Phase III HARBOR trial of delpacibart etedesiran for myotonic dystrophy type 1 failed to show a statistically significant benefit over placebo on the primary hand myotonia endpoint. The study...
Novartis Pelacarsen Fails to Cut Cardiovascular Events in Key Phase III Lp(a) Trial
Sep 4, 2026
On September 4, 2026, Novartis reported topline Phase III results from its Lp(a)HORIZON trial evaluating pelacarsen in 8,323 patients with elevated lipoprotein(a) and established cardiovascular disease. The study, a major outcomes trial, did not m...
Novartis Reports Positive Phase III Results for Oral BTK Inhibitor Remibrutinib in Relapsing Multiple Sclerosis
Sep 1, 2026
On September 1, 2026, Novartis reported positive topline Phase III results for remibrutinib in the REMODEL-1 and REMODEL-2 trials in adults with relapsing multiple sclerosis (RMS), where the oral Bruton’s tyrosine kinase inhibitor significan...
Novartis Returns to Sales Growth in Q2 2026 but Earnings Weaken as Guidance Reaffirmed
Jul 21, 2026
On July 21, 2026, Novartis reported second-quarter 2026 results showing a return to top-line growth, with net sales up 1% at constant currencies and 3% in U.S. dollars to USD 14.4 billion, driven by strong volume and priority brands such as Kisqal...
Novartis Del-brax Trial Hits Key Biomarker Goals in FSHD, Phase III Under Way
Jun 11, 2026
On June 11, 2026, Novartis reported that the biomarker cohort of its FORTITUDE Phase I/II trial of delpacibart braxlosiran (del-brax) in facioscapulohumeral muscular dystrophy met its primary and key secondary endpoints, showing reductions in KHDC...
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.