SWX:NOVN

Stock Analysis Report

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Executive Summary

Novartis AG researches, develops, manufactures, and markets healthcare products worldwide. More Details


Snowflake Analysis

Average dividend payer and slightly overvalued.


Similar Companies

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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.9%

NOVN

-3.6%

CH Pharmaceuticals

-1.9%

CH Market


1 Year Return

-12.1%

NOVN

-4.8%

CH Pharmaceuticals

-1.8%

CH Market

Return vs Industry: NOVN underperformed the Swiss Pharmaceuticals industry which returned -5.1% over the past year.

Return vs Market: NOVN underperformed the Swiss Market which returned -1.1% over the past year.


Shareholder returns

NOVNIndustryMarket
7 Day-2.9%-3.6%-1.9%
30 Day-5.0%-7.8%-2.0%
90 Day-1.5%-5.9%-1.7%
1 Year-8.8%-12.1%-1.6%-4.8%1.6%-1.8%
3 Year17.5%-6.5%30.7%11.9%15.5%3.3%
5 Year15.4%-14.7%23.2%-1.1%31.3%9.3%

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?

37.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NOVN (CHF76.33) is trading below our estimate of fair value (CHF121.61)

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


Price To Earnings Ratio

PE vs Industry: NOVN is poor value based on its PE Ratio (26.6x) compared to the XE Pharmaceuticals industry average (22.3x).

PE vs Market: NOVN is poor value based on its PE Ratio (26.6x) compared to the Swiss market (21.6x).


Price to Earnings Growth Ratio

PEG Ratio: NOVN is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: NOVN is overvalued based on its PB Ratio (3.6x) compared to the CH Pharmaceuticals industry average (3.1x).


Next Steps

Future Growth

How is Novartis forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

9.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NOVN's forecast earnings growth (9.9% per year) is above the savings rate (-0.2%).

Earnings vs Market: NOVN's earnings (9.9% per year) are forecast to grow slower than the Swiss market (11.9% per year).

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

Revenue vs Market: NOVN's revenue (3.9% per year) is forecast to grow slower than the Swiss market (4.5% per year).

High Growth Revenue: NOVN's revenue (3.9% 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 (28.9%)


Next Steps

Past Performance

How has Novartis performed over the past 5 years?

4.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NOVN has a large one-off loss of $4.1B impacting its June 30 2020 financial results.

Growing Profit Margin: NOVN's current net profit margins (14.6%) are lower than last year (15.1%).


Past Earnings Growth Analysis

Earnings Trend: NOVN's earnings have grown by 4% per year over the past 5 years.

Accelerating Growth: NOVN's earnings growth over the past year (1.9%) is below its 5-year average (4% per year).

Earnings vs Industry: NOVN earnings growth over the past year (1.9%) underperformed the Pharmaceuticals industry 13.1%.


Return on Equity

High ROE: NOVN's Return on Equity (13.4%) is considered low.


Next Steps

Financial Health

How is Novartis's financial position?


Financial Position Analysis

Short Term Liabilities: NOVN's short term assets ($23.9B) do not cover its short term liabilities ($29.4B).

Long Term Liabilities: NOVN's short term assets ($23.9B) do not cover its long term liabilities ($40.5B).


Debt to Equity History and Analysis

Debt Level: NOVN's debt to equity ratio (60.9%) is considered high.

Reducing Debt: NOVN's debt to equity ratio has increased from 29.5% to 60.9% over the past 5 years.

Debt Coverage: NOVN's debt is well covered by operating cash flow (44.4%).

Interest Coverage: NOVN's interest payments on its debt are well covered by EBIT (21.1x coverage).


Balance Sheet


Next Steps

Dividend

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

3.56%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NOVN's dividend (3.56%) is higher than the bottom 25% of dividend payers in the Swiss market (1.98%).

High Dividend: NOVN's dividend (3.56%) is low compared to the top 25% of dividend payers in the Swiss market (3.78%).


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: With its high payout ratio (95.9%), NOVN's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NOVN's dividends in 3 years are forecast to be well covered by earnings (47.9% payout ratio).


Next Steps

Management

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

2.5yrs

Average management tenure


CEO

Vas Narasimhan (44 yo)

2.67yrs

Tenure

US$11,437,501

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 ($USD13.02M) is above average for companies of similar size in the Swiss market ($USD6.43M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Vasant Narasimhan
Chief Executive Officer2.67yrsUS$11.44m0.012%
$ 20.6m
Harry Kirsch
Chief Financial Officer7.42yrsUS$6.08m0.011%
$ 19.2m
Steffen Lang
Global Head of Technical Operations3.5yrsUS$3.14m0.0049%
$ 8.2m
Shannon Klinger
Chief Legal Officer2.33yrsUS$3.62m0.0032%
$ 5.4m
Klaus Moosmayer
Chief Ethics1.83yrsUS$2.12m0.00068%
$ 1.1m
Steven Baert
Chief People & Organization Officer6.67yrsUS$4.01m0.0062%
$ 10.4m
Bertrand Bodson
Chief Digital Officer2.75yrsUS$2.57m0.0014%
$ 2.4m
John Tsai
Head of Global Drug Development & Chief Medical Officer2.42yrsUS$4.69m0.0024%
$ 4.1m
Robert Weltevreden
Head of Novartis Business Services2.33yrsUS$2.38m0.00088%
$ 1.5m
Susanne Schaffert
President of Novartis Oncology1.75yrsUS$4.58m0.0049%
$ 8.2m
Richard Saynor
Chief Executive Officer of Sandoz1.25yrsUS$3.17m0.00050%
$ 840.8k
James Bradner
President of Novartis Institutes for Biomedical Research4.58yrsUS$6.31m0.0078%
$ 13.2m

2.5yrs

Average Tenure

51.5yo

Average Age

Experienced Management: NOVN's management team is considered experienced (2.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Alex Krauer
Honorary Chairmanno datano datano data
Daniel Vasella
Honorary Chairmanno dataUS$2.98mno data
Ann Fudge
Independent Non Executive Director12.67yrsUS$400.00k0.00064%
$ 1.1m
Andreas von Planta
Independent Non Executive Director14.67yrsUS$464.37k0.0073%
$ 12.3m
Joerg Reinhardt
Independent Non Executive Chairman7.17yrsUS$3.80m0.026%
$ 43.0m
Srikant T. Datar
Independent Non Executive Director17.75yrsUS$460.00k0.0019%
$ 3.2m
Ton Büchner
Independent Non-Executive Director4.67yrsUS$354.37k0.00050%
$ 840.8k
William Winters
Independent Non Executive Director7.75yrsUS$353.33k0.00082%
$ 1.4m
Charles Sawyers
Independent Non Executive Director7.75yrsUS$360.00k0.00050%
$ 840.8k
Enrico Vanni
Independent Non Executive Vice Chairman7.67yrsUS$533.51k0.0012%
$ 2.0m
Nancy Andrews
Independent Non Executive Director5.67yrsUS$360.00k0.00033%
$ 555.0k
Elizabeth Doherty
Independent Non-Executive Director4.67yrsUS$450.00k0.00031%
$ 521.3k

7.7yrs

Average Tenure

64yo

Average Age

Experienced Board: NOVN's board of directors are considered experienced (7.7 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 not been meaningfully diluted in the past year.


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: 1895
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: CHF168.170b
  • Shares outstanding: 2.20b
  • Website: https://www.novartis.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NVSNYSE (New York Stock Exchange)ADR-EACH REPR 1 CHF0.5(REGD)USUSDNov 1991
NVS NBMV (Bolsa Mexicana de Valores)ADR-EACH REPR 1 CHF0.5(REGD)MXMXNNov 1991
NOTADB (Deutsche Boerse AG)ADR-EACH REPR 1 CHF0.5(REGD)DEEURNov 1991
0K9ELSE (London Stock Exchange)ADR-EACH REPR 1 CHF0.5(REGD)GBUSDNov 1991
NVSE.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDDec 1996
NOVNSWX (SIX Swiss Exchange)YesCommon StockCHCHFDec 1996
NOTDB (Deutsche Boerse AG)YesCommon StockDEEURDec 1996
NOTXTRA (XETRA Trading Platform)YesCommon StockDEEURDec 1996
NVSBASE (Buenos Aires Stock Exchange)CEDEAR EACH REP 0.5 ADRARARSDec 2003
NOVNEESWX (SIX Swiss Exchange)CHF0.50 (2ND BUYBACK LINE)CHCHFMar 2008
0QM7LSE (London Stock Exchange)CHF0.50 (2ND BUYBACK LINE)GBCHFMar 2008

Biography

Novartis AG researches, develops, manufactures, and markets healthcare products worldwide. Its Innovative Medicines segment offers prescription medicines for patients and healthcare providers. It also prov ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/26 22:13
End of Day Share Price2020/10/26 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.