NOVARTIS AG-SPONSORED ADR (NVS) Stock Fundamental Analysis
NYSE:NVS - US66987V1098 - ADR
126.61 USD
+0.14 (+0.11%)
We assign a fundamental rating of 7 out of 10 to NVS. NVS was compared to 193 industry peers in the Pharmaceuticals industry. NVS gets an excellent profitability rating and is at the same time showing great financial health properties. NVS may be a bit undervalued, certainly considering the very reasonable score on growth With these ratings, NVS could be worth investigating further for value and quality investing!.
1. Profitability
1.1 Basic Checks
NVS had positive earnings in the past year.
In the past year NVS had a positive cash flow from operations.
NVS had positive earnings in each of the past 5 years.
In the past 5 years NVS always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of NVS (13.08%) is better than 93.78% of its industry peers.
NVS has a better Return On Equity (32.52%) than 95.34% of its industry peers.
NVS has a better Return On Invested Capital (22.91%) than 96.89% of its industry peers.
NVS had an Average Return On Invested Capital over the past 3 years of 14.58%. This is in line with the industry average of 15.38%.
The last Return On Invested Capital (22.91%) for NVS is above the 3 year average (14.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.08% | ||
| ROE | 32.52% | ||
| ROIC | 22.91% |
ROA(3y)10.82%
ROA(5y)11.4%
ROE(3y)23.55%
ROE(5y)24.08%
ROIC(3y)14.58%
ROIC(5y)12.83%
1.3 Margins
NVS has a Profit Margin of 24.90%. This is amongst the best in the industry. NVS outperforms 94.30% of its industry peers.
In the last couple of years the Profit Margin of NVS has remained more or less at the same level.
Looking at the Operating Margin, with a value of 33.45%, NVS belongs to the top of the industry, outperforming 95.34% of the companies in the same industry.
NVS's Operating Margin has improved in the last couple of years.
NVS has a Gross Margin of 76.12%. This is amongst the best in the industry. NVS outperforms 83.94% of its industry peers.
In the last couple of years the Gross Margin of NVS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.45% | ||
| PM (TTM) | 24.9% | ||
| GM | 76.12% |
OM growth 3Y8.17%
OM growth 5Y6.25%
PM growth 3Y-24.95%
PM growth 5Y-0.88%
GM growth 3Y0.5%
GM growth 5Y1.06%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so NVS is creating value.
Compared to 1 year ago, NVS has less shares outstanding
The number of shares outstanding for NVS has been reduced compared to 5 years ago.
Compared to 1 year ago, NVS has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.95 indicates that NVS is not in any danger for bankruptcy at the moment.
NVS has a better Altman-Z score (3.95) than 75.65% of its industry peers.
The Debt to FCF ratio of NVS is 1.93, which is an excellent value as it means it would take NVS, only 1.93 years of fcf income to pay off all of its debts.
NVS's Debt to FCF ratio of 1.93 is amongst the best of the industry. NVS outperforms 93.26% of its industry peers.
A Debt/Equity ratio of 0.57 indicates that NVS is somewhat dependend on debt financing.
NVS has a worse Debt to Equity ratio (0.57) than 63.73% of its industry peers.
Even though the debt/equity ratio score it not favorable for NVS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.93 | ||
| Altman-Z | 3.95 |
ROIC/WACC4.8
WACC4.77%
2.3 Liquidity
A Current Ratio of 0.82 indicates that NVS may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.82, NVS is doing worse than 86.01% of the companies in the same industry.
A Quick Ratio of 0.62 indicates that NVS may have some problems paying its short term obligations.
NVS has a worse Quick ratio (0.62) than 86.53% of its industry peers.
The current and quick ratio evaluation for NVS is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
NVS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.58%, which is quite impressive.
Measured over the past years, NVS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.14% on average per year.
The Revenue has grown by 12.24% in the past year. This is quite good.
NVS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.24% yearly.
EPS 1Y (TTM)22.58%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%22.84%
Revenue 1Y (TTM)12.24%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%12.32%
3.2 Future
Based on estimates for the next years, NVS will show a small growth in Earnings Per Share. The EPS will grow by 7.33% on average per year.
Based on estimates for the next years, NVS will show a small growth in Revenue. The Revenue will grow by 4.26% on average per year.
EPS Next Y16.29%
EPS Next 2Y9.95%
EPS Next 3Y9.26%
EPS Next 5Y7.33%
Revenue Next Year9.54%
Revenue Next 2Y5.95%
Revenue Next 3Y4.97%
Revenue Next 5Y4.26%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
NVS is valuated correctly with a Price/Earnings ratio of 14.31.
Compared to the rest of the industry, the Price/Earnings ratio of NVS indicates a rather cheap valuation: NVS is cheaper than 87.05% of the companies listed in the same industry.
NVS's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.17.
With a Price/Forward Earnings ratio of 13.24, NVS is valued correctly.
Based on the Price/Forward Earnings ratio, NVS is valued cheaply inside the industry as 83.42% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.78, NVS is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.31 | ||
| Fwd PE | 13.24 |
4.2 Price Multiples
87.05% of the companies in the same industry are more expensive than NVS, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NVS indicates a rather cheap valuation: NVS is cheaper than 86.01% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.58 | ||
| EV/EBITDA | 11.1 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NVS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.88
PEG (5Y)1.76
EPS Next 2Y9.95%
EPS Next 3Y9.26%
5. Dividend
5.1 Amount
NVS has a Yearly Dividend Yield of 1.83%. Purely for dividend investing, there may be better candidates out there.
NVS's Dividend Yield is rather good when compared to the industry average which is at 3.82. NVS pays more dividend than 91.71% of the companies in the same industry.
NVS's Dividend Yield is slightly below the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.83% |
5.2 History
The dividend of NVS has a limited annual growth rate of 5.49%.
NVS has paid a dividend for at least 10 years, which is a reliable track record.
NVS has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)5.49%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
NVS pays out 57.26% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of NVS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP57.26%
EPS Next 2Y9.95%
EPS Next 3Y9.26%
NYSE:NVS (8/29/2025, 12:15:52 PM)
126.61
+0.14 (+0.11%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners34.27%
Inst Owner Change-4.49%
Ins Owners0.01%
Ins Owner ChangeN/A
Market Cap245.10B
Analysts69.03
Price Target129.88 (2.58%)
Short Float %0.24%
Short Ratio2.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.83% |
Yearly Dividend3.79
Dividend Growth(5Y)5.49%
DP57.26%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.6%
Min EPS beat(2)0.61%
Max EPS beat(2)6.59%
EPS beat(4)4
Avg EPS beat(4)4.26%
Min EPS beat(4)0.61%
Max EPS beat(4)6.59%
EPS beat(8)7
Avg EPS beat(8)2.76%
EPS beat(12)10
Avg EPS beat(12)3.62%
EPS beat(16)12
Avg EPS beat(16)2.73%
Revenue beat(2)0
Avg Revenue beat(2)-1.98%
Min Revenue beat(2)-2.84%
Max Revenue beat(2)-1.13%
Revenue beat(4)1
Avg Revenue beat(4)-1.13%
Min Revenue beat(4)-2.84%
Max Revenue beat(4)0.78%
Revenue beat(8)2
Avg Revenue beat(8)-1.36%
Revenue beat(12)3
Avg Revenue beat(12)-5.01%
Revenue beat(16)5
Avg Revenue beat(16)-3.81%
PT rev (1m)0.01%
PT rev (3m)2.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.77%
EPS NY rev (1m)4.47%
EPS NY rev (3m)5.57%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)6.7%
Revenue NY rev (1m)1.67%
Revenue NY rev (3m)1.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.31 | ||
| Fwd PE | 13.24 | ||
| P/S | 4.47 | ||
| P/FCF | 14.58 | ||
| P/OCF | 11.79 | ||
| P/B | 5.84 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.1 |
EPS(TTM)8.85
EY6.99%
EPS(NY)9.56
Fwd EY7.55%
FCF(TTM)8.68
FCFY6.86%
OCF(TTM)10.74
OCFY8.48%
SpS28.33
BVpS21.69
TBVpS-6.62
PEG (NY)0.88
PEG (5Y)1.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.08% | ||
| ROE | 32.52% | ||
| ROCE | 25.24% | ||
| ROIC | 22.91% | ||
| ROICexc | 25.24% | ||
| ROICexgc | 149.23% | ||
| OM | 33.45% | ||
| PM (TTM) | 24.9% | ||
| GM | 76.12% | ||
| FCFM | 30.64% |
ROA(3y)10.82%
ROA(5y)11.4%
ROE(3y)23.55%
ROE(5y)24.08%
ROIC(3y)14.58%
ROIC(5y)12.83%
ROICexc(3y)17.82%
ROICexc(5y)15.74%
ROICexgc(3y)90.48%
ROICexgc(5y)78.58%
ROCE(3y)16.96%
ROCE(5y)14.93%
ROICexcg growth 3Y14.29%
ROICexcg growth 5Y25.26%
ROICexc growth 3Y20.9%
ROICexc growth 5Y13.17%
OM growth 3Y8.17%
OM growth 5Y6.25%
PM growth 3Y-24.95%
PM growth 5Y-0.88%
GM growth 3Y0.5%
GM growth 5Y1.06%
F-Score6
Asset Turnover0.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.93 | ||
| Debt/EBITDA | 0.99 | ||
| Cap/Depr | 66.33% | ||
| Cap/Sales | 7.26% | ||
| Interest Coverage | 19.66 | ||
| Cash Conversion | 85.38% | ||
| Profit Quality | 123.09% | ||
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.62 | ||
| Altman-Z | 3.95 |
F-Score6
WACC4.77%
ROIC/WACC4.8
Cap/Depr(3y)51.13%
Cap/Depr(5y)48.4%
Cap/Sales(3y)6.48%
Cap/Sales(5y)6.27%
Profit Quality(3y)120.24%
Profit Quality(5y)109.63%
High Growth Momentum
Growth
EPS 1Y (TTM)22.58%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%22.84%
EPS Next Y16.29%
EPS Next 2Y9.95%
EPS Next 3Y9.26%
EPS Next 5Y7.33%
Revenue 1Y (TTM)12.24%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%12.32%
Revenue Next Year9.54%
Revenue Next 2Y5.95%
Revenue Next 3Y4.97%
Revenue Next 5Y4.26%
EBIT growth 1Y44.75%
EBIT growth 3Y14.18%
EBIT growth 5Y7.57%
EBIT Next Year30.73%
EBIT Next 3Y11.41%
EBIT Next 5Y9.41%
FCF growth 1Y32.64%
FCF growth 3Y4.49%
FCF growth 5Y3.96%
OCF growth 1Y35.29%
OCF growth 3Y5.34%
OCF growth 5Y5.28%