Novartis AG (SWX: NOVN), commonly known as Novartis, is a prominent Swiss multinational pharmaceutical company. The company was formed in 1996 through the merger of Ciba-Geigy and Sandoz. Novartis has a long and successful history in developing, manufacturing, and marketing healthcare products. Today, it ranks as one of the world’s largest pharmaceutical companies.
Novartis shares trade on the New York Stock Exchange (NYSE) under the ticker symbol NVS. The stock is also listed on the SIX Swiss Exchange under the symbol (NOVN).
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Pharmaceutical Industry Comparison
Novartis EPS and Revenue Breakdown 2020-2023
| Novartis | Annual EPS | Annual Revenue |
|---|---|---|
| 2020 | $5.78 | $48.66 billion |
| 2021 | $6.29 | $51.63 billion |
| 2022 | $6.12 | $50.55 billion |
| 2023 | $6.47 | $45.44 billion |
Novartis offers a diversified portfolio of healthcare products across various segments. The company’s core business units include pharmaceuticals, eye care and generics. The three divisions are supported by the company’s research organisation, the Novartis Institutes for BioMedical Research (NIBR), and a centralised services group, Novartis Business Services.
Novartis Share Price & Dividend Yield
For the last year, the Novartis share price has ranged somewhat, despite looking as though it would break higher towards the end of 2023. However, ranging is something the stock has done fairly often. Looking back to between 2020 and 2023, we can see the stock was bouncing around before experiencing a move higher in April 2023.
Novartis pays dividends, with its current dividend yield around the 3.78% mark.
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Novartis Share Price Forecast
In March, analysts at Oddo BHF lowered their rating for Novartis to Neutral from Outperform, saying they see limited upside to the company’s valuation and clinical news flow in the near term.
In February, BMO Capital started coverage of Novartis with a Market Perform rating and a $114 price target. The investment firm explained that following the Sandoz spinoff, they view Novartis as well-positioned for long-term growth. However, at the time the target price implied only a modest upside to its stock.
In April, BMO Capital lifted its price target on Novartis to $116.00 from $114, keeping its Market Perform rating. The firm said it was updating its model after Novartis beat earnings expectations and raised guidance. BMO added that while it “views the near-term outlook as an incremental positive,” its longer-term outlook is unchanged.Overall, according to data compiled by TipRanks, most analysts (four) have a Hold rating on Novartis shares, while one analyst has a Buy rating on the stock. The current analyst consensus price target of $119.45 suggests a potential upside of more than 10% to the stock from current levels.
Our View: Overall, Novartis can be considered a steady stock and possibly one to assess further for dividend-focused investors. However, there are always industry risks in the pharmaceutical industry to assess beforehand.
Suitability
Many factors influence whether to invest in a stock like Novartis (NOVN) or any other company. However, equally important but often overlooked are your own investment goals, risk tolerance, and investment timeline. Here’s a breakdown:
Align your investment timeline with your outlook for Novartis’s growth. Novartis’s drug pipeline and market position, driven by a positive outlook on its long-term prospects, might make NVS a compelling investment for long-term investors.
The pharmaceutical industry experiences volatility due to factors like clinical trial results, regulatory changes, and patent expirations. Before investing in Novartis, assess your comfort level with this inherent risk (risk tolerance).
Do you prefer value or growth stocks? This is important to consider when adding companies to your portfolio. Novartis boasts a strong pipeline of drugs in development, which could fuel future growth and stock appreciation. However, over the last year or so, there has been a lack of share price upside.
Novartis offers a dividend, providing a potential source of regular income for investors seeking income-focused stocks. When making your decision, consider Novartis’s dividend history and future payout potential.
The pharmaceutical industry faces various risks, including patent expirations, government regulations, and clinical trial failures. Investors comfortable with this volatility might find Novartis suitable.
