SWX:NOVN

Stock Analysis Report

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Market Cap

CHF204.2b

Last Updated

2021/07/31 03:50 UTC

Data Sources

Company Financials +

Share Price & News

How has Novartis's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NOVN is less volatile than 75% of Swiss stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: NOVN's weekly volatility (2%) has been stable over the past year.


Market Performance


7 Day Return

-0.8%

NOVN

0.2%

CH Pharmaceuticals

-0.05%

CH Market


1 Year Return

11.1%

NOVN

10.7%

CH Pharmaceuticals

23.2%

CH Market

Return vs Industry: NOVN matched the Swiss Pharmaceuticals industry which returned 10.7% over the past year.

Return vs Market: NOVN underperformed the Swiss Market which returned 23.2% over the past year.


Shareholder returns

NOVNIndustryMarket
7 Day-0.8%0.2%-0.05%
30 Day-0.6%0.2%1.7%
90 Day7.6%13.0%9.8%
1 Year15.4%11.1%14.3%10.7%26.6%23.2%
3 Year27.6%1.4%40.9%20.9%41.2%25.8%
5 Year39.0%2.9%51.4%21.4%69.9%39.2%

Long-Term Price Volatility Vs. Market

How volatile is Novartis's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Novartis undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NOVN (CHF83.88) is trading below our estimate of fair value (CHF191.67)

Significantly Below Fair Value: NOVN is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NOVN is good value based on its PE Ratio (23.3x) compared to the European Pharmaceuticals industry average (25x).

PE vs Market: NOVN is poor value based on its PE Ratio (23.3x) compared to the Swiss market (22.7x).


Price to Earnings Growth Ratio

PEG Ratio: NOVN is poor value based on its PEG Ratio (4x)


Price to Book Ratio

PB vs Industry: NOVN is overvalued based on its PB Ratio (3.8x) compared to the CH Pharmaceuticals industry average (3.3x).


Future Growth

How is Novartis forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

5.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NOVN's forecast earnings growth (5.9% per year) is above the savings rate (-0.3%).

Earnings vs Market: NOVN's earnings (5.9% per year) are forecast to grow slower than the Swiss market (11.3% per year).

High Growth Earnings: NOVN's earnings are forecast to grow, but not significantly.

Revenue vs Market: NOVN's revenue (2.9% per year) is forecast to grow slower than the Swiss market (5.2% per year).

High Growth Revenue: NOVN's revenue (2.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NOVN's Return on Equity is forecast to be high in 3 years time (26.7%)


Past Performance

How has Novartis performed over the past 5 years?

2.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NOVN has a large one-off loss of $2.8B impacting its June 30 2021 financial results.

Growing Profit Margin: NOVN's current net profit margins (17.4%) are higher than last year (14.6%).


Past Earnings Growth Analysis

Earnings Trend: NOVN's earnings have grown by 2.4% per year over the past 5 years.

Accelerating Growth: NOVN's earnings growth over the past year (24.6%) exceeds its 5-year average (2.4% per year).

Earnings vs Industry: NOVN earnings growth over the past year (24.6%) exceeded the Pharmaceuticals industry 8.2%.


Return on Equity

High ROE: NOVN's Return on Equity (16.6%) is considered low.


Financial Health

How is Novartis's financial position?


Financial Position Analysis

Short Term Liabilities: NOVN's short term assets ($23.8B) do not cover its short term liabilities ($29.6B).

Long Term Liabilities: NOVN's short term assets ($23.8B) do not cover its long term liabilities ($40.3B).


Debt to Equity History and Analysis

Debt Level: NOVN's debt to equity ratio (62.6%) is considered high.

Reducing Debt: NOVN's debt to equity ratio has increased from 36.3% to 62.6% over the past 5 years.

Debt Coverage: NOVN's debt is well covered by operating cash flow (39.6%).

Interest Coverage: NOVN's interest payments on its debt are well covered by EBIT (19x coverage).


Balance Sheet


Dividend

What is Novartis's current dividend yield, its reliability and sustainability?

3.44%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NOVN's dividend (3.44%) is higher than the bottom 25% of dividend payers in the Swiss market (1.42%).

High Dividend: NOVN's dividend (3.44%) is low compared to the top 25% of dividend payers in the Swiss market (3.53%).


Stability and Growth of Payments

Stable Dividend: NOVN's dividends per share have been stable in the past 10 years.

Growing Dividend: NOVN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (85.6%), NOVN's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NOVN's dividends in 3 years are forecast to be well covered by earnings (48% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average management tenure


CEO

Vas Narasimhan (45 yo)

3.33yrs

Tenure

US$11,734,153

Compensation

Dr. Vasant Narasimhan, also known as Vas, M.D., serves as Chief Executive Officer of Novartis AG at Novartis India Ltd. Dr. Narasimhan has been Chief Executive Officer of Novartis AG since February 1, 2018...


CEO Compensation Analysis

Compensation vs Market: Vas's total compensation ($USD11.73M) is above average for companies of similar size in the Swiss market ($USD5.82M).

Compensation vs Earnings: Vas's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: NOVN's management team is considered experienced (3.2 years average tenure).


Board Members

Experienced Board: NOVN's board of directors are considered experienced (8.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 10.5%.


Top Shareholders

Company Information

Novartis AG's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Novartis AG
  • Ticker: NOVN
  • Exchange: SWX
  • Founded: 1996
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: CHF204.199b
  • Shares outstanding: 2.43b
  • Website: https://www.novartis.com

Number of Employees


Location

  • Novartis AG
  • Lichtstrasse 35
  • Basel
  • Basel-Stadt
  • 4056
  • Switzerland

Listings


Biography

Novartis AG researches, develops, manufactures, and markets healthcare products worldwide. The company operates through two segments, Innovative Medicines and Sandoz. The Innovative Medicines segment offer...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/31 03:50
End of Day Share Price2021/07/30 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.