XTRA:NOT

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Average dividend payer and fair value.


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


Market Performance


7 Day Return

0%

NOT

2.7%

DE Pharmaceuticals

2.4%

DE Market


1 Year Return

9.3%

NOT

-3.7%

DE Pharmaceuticals

2.3%

DE Market

Return vs Industry: NOT exceeded the German Pharmaceuticals industry which returned -3.7% over the past year.

Return vs Market: NOT exceeded the German Market which returned 2.3% over the past year.


Shareholder returns

NOTIndustryMarket
7 Day0%2.7%2.4%
30 Day0%0.2%-0.2%
90 Day0.1%10.7%0.6%
1 Year28.0%9.3%-0.4%-3.7%5.5%2.3%
3 Year40.2%11.5%-4.5%-12.5%18.9%8.6%
5 Year45.2%8.2%0.08%-12.3%44.8%25.1%

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

No news available

Valuation

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

45.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: NOT (€80.34) is trading below our estimate of fair value (€147.11)

Significantly Undervalued: NOT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NOT is good value based on its PE Ratio (28.8x) compared to the Pharmaceuticals industry average (31.7x).

PE vs Market: NOT is poor value based on its PE Ratio (28.8x) compared to the German market (19.5x).


Price to Earnings Growth Ratio

Low PEG Ratio: NOT is poor value based on its PEG Ratio (4.5x)


Price to Book Ratio

PB vs Industry: NOT is overvalued based on its PB Ratio (3.8x) compared to the DE Pharmaceuticals industry average (2.6x).


Next Steps

Future Growth

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

6.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NOT's forecast earnings growth (6.4% per year) is above the savings rate (0.2%).

Earnings vs Market: NOT's earnings (6.4% per year) are forecast to grow slower than the German market (12.6% per year).

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

Revenue vs Market: NOT's revenue (3.7% per year) is forecast to grow slower than the German market (5% per year).

High Growth Revenue: NOT's revenue (3.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: NOT's Return on Equity is forecast to be high in 3 years time (20.2%)


Next Steps

Past Performance

How has Novartis performed over the past 5 years?

3.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: NOT's earnings have grown by 3.3% per year over the past 5 years.

Accelerating Growth: NOT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NOT had negative earnings growth (-49.9%) over the past year, making it difficult to compare to the Pharmaceuticals industry average (0.4%).


Return on Equity

High ROE: NOT's Return on Equity (13.4%) is considered low.


Return on Assets

ROA vs Industry: NOT has a higher Return on Assets than the Pharmaceuticals industry average last year.


Return on Capital Employed

ROCE Improving: NOT has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Novartis's financial position?


Financial Position Analysis

Short Term Liabilities: NOT's short term assets ($28.3B) do not cover its short term liabilities ($30.1B)

Long Term Liabilities: NOT's short term assets (28.3B) do not cover its long term liabilities (34.7B)


Debt to Equity History and Analysis

Debt Level: NOT's debt to equity ratio (54.8%) is considered high

Reducing Debt: NOT's debt to equity ratio has increased from 29% to 54.8% over the past 5 years.

Debt Coverage: NOT's debt is well covered by operating cash flow (47.3%).

Interest Coverage: NOT's interest payments on its debt are well covered by EBIT (18.4x coverage).


Balance Sheet

Inventory Level: NOT has a low level of unsold assets or inventory.

Debt Coverage by Assets: NOT's debt is covered by short term assets (assets are 1.003500x debt).


Next Steps

Dividend

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

3.25%

Current Dividend Yield


Dividend Yield vs Market

company3.3%marketbottom25%1.4%markettop25%3.9%industryaverage2.8%forecastin3Years3.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: NOT's dividend (3.25%) is higher than the bottom 25% of dividend payers in the German market (1.43%).

High Dividend: NOT's dividend (3.25%) is low compared to the top 25% of dividend payers in the German market (3.86%).

Stable Dividend: NOT's dividends per share have been stable in the past 10 years.

Growing Dividend: NOT's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (97%), NOT's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NOT's dividends in 3 years are forecast to be covered by earnings (51.3% payout ratio).


Next Steps

Management

What is the CEO of Novartis's salary, the management and board of directors tenure and is there insider trading?

1.6yrs

Average management tenure


CEO

Vas Narasimhan (43yo)

1.6yrs

Tenure

US$9,921,492

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 has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the German market.

Compensation vs Earnings: Vas's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

1.6yrs

Average Tenure

49yo

Average Age

Experienced Management: NOT's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Age and Tenure

6.7yrs

Average Tenure

64yo

Average Age

Experienced Board: NOT's board of directors are considered experienced (6.7 years average tenure).


Insider Trading

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


Ownership Breakdown


Management Team

  • Shannon Klinger (48yo)

    Group General Counsel

    • Tenure: 1.3yrs
    • Compensation: US$2.19m
  • Bertrand Bodson (44yo)

    Chief Digital Officer

    • Tenure: 1.7yrs
    • Compensation: US$1.83m
  • Jay Bradner (47yo)

    President of Novartis Institutes for Biomedical Research

    • Tenure: 3.5yrs
    • Compensation: US$6.01m
  • Klaus Moosmayer (51yo)

    Chief Ethics

    • Tenure: 0.8yrs
    • Compensation: US$1.35m
  • Harry Kirsch (54yo)

    Chief Financial Officer

    • Tenure: 6.3yrs
    • Compensation: US$5.59m
  • Steven Baert (45yo)

    Chief People & Organization Officer

    • Tenure: 5.6yrs
    • Compensation: US$3.82m
  • Vas Narasimhan (43yo)

    Chief Executive Officer

    • Tenure: 1.6yrs
    • Compensation: US$9.92m
  • John Tsai (52yo)

    Head of Global Drug Development & Chief Medical Officer

    • Tenure: 1.3yrs
    • Compensation: US$6.20m
  • Steffen Lang (52yo)

    Global Head of Technical Operations

    • Tenure: 2.4yrs
    • Compensation: US$2.12m
  • Robert Weltevreden (50yo)

    Head of Novartis Business Services

    • Tenure: 1.3yrs
    • Compensation: US$1.81m

Board Members

  • Alex Krauer

    Honorary Chairman

    • Tenure: 0yrs
  • Dan Vasella (66yo)

    Honorary Chairman

    • Tenure: 0yrs
    • Compensation: US$2.98m
  • Ann Fudge (68yo)

    Independent Non Executive Director

    • Tenure: 11.6yrs
    • Compensation: US$398.33k
  • Andreas von Planta (64yo)

    Independent Non Executive Director

    • Tenure: 13.6yrs
    • Compensation: US$462.67k
  • Joerg Reinhardt (63yo)

    Independent Non Executive Chairman

    • Tenure: 6.1yrs
    • Compensation: US$3.80m
  • Srikant T. Datar (66yo)

    Independent Non Executive Director

    • Tenure: 16.7yrs
    • Compensation: US$458.33k
  • Bill Winters (58yo)

    Independent Non Executive Director

    • Tenure: 6.7yrs
    • Compensation: US$321.67k
  • Charles Sawyers (60yo)

    Independent Non Executive Director

    • Tenure: 6.7yrs
    • Compensation: US$360.00k
  • Enrico Vanni (68yo)

    Independent Non Executive Vice Chairman

    • Tenure: 6.6yrs
    • Compensation: US$528.48k
  • Liz Doherty (62yo)

    Independent Non-Executive Director

    • Tenure: 3.6yrs
    • Compensation: US$450.00k

Company Information

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


Key Information

  • Name: Novartis AG
  • Ticker: NOT
  • Exchange: XTRA
  • Founded: 1895
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: CHF194.640b
  • Listing Market Cap: CHF179.481b
  • Shares outstanding: 2.29b
  • 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
0QLRLSE (London Stock Exchange)YesCommon StockGBCHFDec 1996
NOTXTRA (XETRA Trading Platform)YesCommon StockDEEURDec 1996
NOVNEESWX (SIX Swiss Exchange)CHF0.50 (2ND BUYBACK LINE)CHCHFMar 2008

Biography

Novartis AG researches, develops, manufactures, and markets healthcare products worldwide. The company’s Innovative Medicines segment offers prescription medicines for patients and healthcare providers. It ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/25 21:21
End of Day Share Price2019/06/28 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.