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NOVARTIS AG-SPONSORED ADR (NVS) Stock Fundamental Analysis

NYSE:NVS - New York Stock Exchange, Inc. - US66987V1098 - ADR - Currency: USD

104.99  -1.84 (-1.72%)

After market: 104.99 0 (0%)

Fundamental Rating

7

Overall NVS gets a fundamental rating of 7 out of 10. We evaluated NVS against 198 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!.


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

NVS had positive earnings in the past year.
NVS had a positive operating cash flow in the past year.
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.
NVS Yearly Net Income VS EBIT VS OCF VS FCFNVS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B

1.2 Ratios

NVS has a Return On Assets of 12.87%. This is amongst the best in the industry. NVS outperforms 95.45% of its industry peers.
NVS's Return On Equity of 33.51% is amongst the best of the industry. NVS outperforms 95.96% of its industry peers.
NVS has a better Return On Invested Capital (23.17%) than 95.45% of its industry peers.
NVS had an Average Return On Invested Capital over the past 3 years of 14.58%. This is significantly below the industry average of 41.51%.
The last Return On Invested Capital (23.17%) for NVS is above the 3 year average (14.58%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 12.87%
ROE 33.51%
ROIC 23.17%
ROA(3y)10.82%
ROA(5y)11.4%
ROE(3y)23.55%
ROE(5y)24.08%
ROIC(3y)14.58%
ROIC(5y)12.83%
NVS Yearly ROA, ROE, ROICNVS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30

1.3 Margins

Looking at the Profit Margin, with a value of 24.15%, NVS belongs to the top of the industry, outperforming 94.95% of the companies in the same industry.
NVS's Profit Margin has been stable in the last couple of years.
NVS has a Operating Margin of 32.76%. This is amongst the best in the industry. NVS outperforms 94.44% of its industry peers.
NVS's Operating Margin has improved in the last couple of years.
NVS has a Gross Margin of 75.69%. This is amongst the best in the industry. NVS outperforms 83.33% of its industry peers.
NVS's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 32.76%
PM (TTM) 24.15%
GM 75.69%
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%
NVS Yearly Profit, Operating, Gross MarginsNVS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60

7

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.
NVS has a worse debt/assets ratio than last year.
NVS Yearly Shares OutstandingNVS Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B 2B
NVS Yearly Total Debt VS Total AssetsNVS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50B 100B

2.2 Solvency

An Altman-Z score of 3.61 indicates that NVS is not in any danger for bankruptcy at the moment.
NVS has a Altman-Z score of 3.61. This is in the better half of the industry: NVS outperforms 78.28% of its industry peers.
NVS has a debt to FCF ratio of 2.10. This is a good value and a sign of high solvency as NVS would need 2.10 years to pay back of all of its debts.
NVS has a Debt to FCF ratio of 2.10. This is amongst the best in the industry. NVS outperforms 93.43% of its industry peers.
A Debt/Equity ratio of 0.61 indicates that NVS is somewhat dependend on debt financing.
NVS has a Debt to Equity ratio of 0.61. This is in the lower half of the industry: NVS underperforms 63.13% of its industry peers.
Although NVS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
Industry RankSector Rank
Debt/Equity 0.61
Debt/FCF 2.1
Altman-Z 3.61
ROIC/WACC4.78
WACC4.85%
NVS Yearly LT Debt VS Equity VS FCFNVS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B

2.3 Liquidity

A Current Ratio of 0.79 indicates that NVS may have some problems paying its short term obligations.
NVS has a Current ratio of 0.79. This is amonst the worse of the industry: NVS underperforms 87.88% of its industry peers.
A Quick Ratio of 0.61 indicates that NVS may have some problems paying its short term obligations.
NVS has a Quick ratio of 0.61. This is amonst the worse of the industry: NVS underperforms 86.87% 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 RankSector Rank
Current Ratio 0.79
Quick Ratio 0.61
NVS Yearly Current Assets VS Current LiabilitesNVS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B 40B

5

3. Growth

3.1 Past

NVS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.60%, which is quite good.
The Earnings Per Share has been growing by 8.14% on average over the past years. This is quite good.
The Revenue has grown by 11.57% in the past year. This is quite good.
Measured over the past years, NVS shows a small growth in Revenue. The Revenue has been growing by 1.24% on average per year.
EPS 1Y (TTM)18.6%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%26.67%
Revenue 1Y (TTM)11.57%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%11.87%

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 4.47% on average per year.
The Revenue is expected to grow by 2.73% on average over the next years.
EPS Next Y11.31%
EPS Next 2Y7.7%
EPS Next 3Y7.64%
EPS Next 5Y4.47%
Revenue Next Year7.74%
Revenue Next 2Y4.8%
Revenue Next 3Y4.01%
Revenue Next 5Y2.73%

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 decreasing.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
NVS Yearly Revenue VS EstimatesNVS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 20B 40B 60B
NVS Yearly EPS VS EstimatesNVS Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2 4 6 8

7

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 12.63 indicates a correct valuation of NVS.
NVS's Price/Earnings ratio is rather cheap when compared to the industry. NVS is cheaper than 87.37% of the companies in the same industry.
When comparing the Price/Earnings ratio of NVS to the average of the S&P500 Index (24.85), we can say NVS is valued slightly cheaper.
The Price/Forward Earnings ratio is 11.57, which indicates a very decent valuation of NVS.
Based on the Price/Forward Earnings ratio, NVS is valued cheaper than 86.36% of the companies in the same industry.
NVS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.89.
Industry RankSector Rank
PE 12.63
Fwd PE 11.57
NVS Price Earnings VS Forward Price EarningsNVS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20

4.2 Price Multiples

NVS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NVS is cheaper than 84.85% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, NVS is valued cheaper than 87.88% of the companies in the same industry.
Industry RankSector Rank
P/FCF 13.97
EV/EBITDA 10.06
NVS Per share dataNVS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20

4.3 Compensation for Growth

NVS's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of NVS may justify a higher PE ratio.
PEG (NY)1.12
PEG (5Y)1.55
EPS Next 2Y7.7%
EPS Next 3Y7.64%

5

5. Dividend

5.1 Amount

NVS has a Yearly Dividend Yield of 3.84%. 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 4.19. NVS pays more dividend than 94.44% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, NVS pays a better dividend.
Industry RankSector Rank
Dividend Yield 3.84%

5.2 History

The dividend of NVS has a limited annual growth rate of 5.49%.
NVS has been paying a dividend for at least 10 years, so it has a reliable track record.
NVS has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.49%
Div Incr Years4
Div Non Decr Years4
NVS Yearly Dividends per shareNVS Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2 4 6 8 10

5.3 Sustainability

NVS pays out 60.27% of its income as dividend. This is not a sustainable payout ratio.
NVS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP60.27%
EPS Next 2Y7.7%
EPS Next 3Y7.64%
NVS Yearly Income VS Free CF VS DividendNVS Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B
NVS Dividend Payout.NVS Dividend Payout, showing the Payout Ratio.NVS Dividend Payout.PayoutRetained Earnings

NOVARTIS AG-SPONSORED ADR

NYSE:NVS (5/14/2025, 8:04:00 PM)

After market: 104.99 0 (0%)

104.99

-1.84 (-1.72%)

Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)04-29 2025-04-29/bmo
Earnings (Next)07-17 2025-07-17/bmo
Inst Owners38.54%
Inst Owner Change-1.72%
Ins Owners0.01%
Ins Owner ChangeN/A
Market Cap207.36B
Analysts68.13
Price Target127.05 (21.01%)
Short Float %0.27%
Short Ratio1.86
Dividend
Industry RankSector Rank
Dividend Yield 3.84%
Yearly Dividend3.79
Dividend Growth(5Y)5.49%
DP60.27%
Div Incr Years4
Div Non Decr Years4
Ex-Date03-12 2025-03-12 (3.99399)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.32%
Min EPS beat(2)6.06%
Max EPS beat(2)6.59%
EPS beat(4)4
Avg EPS beat(4)4.92%
Min EPS beat(4)3.24%
Max EPS beat(4)6.59%
EPS beat(8)7
Avg EPS beat(8)3.4%
EPS beat(12)10
Avg EPS beat(12)3.74%
EPS beat(16)12
Avg EPS beat(16)3.05%
Revenue beat(2)1
Avg Revenue beat(2)-0.17%
Min Revenue beat(2)-1.13%
Max Revenue beat(2)0.78%
Revenue beat(4)1
Avg Revenue beat(4)-0.61%
Min Revenue beat(4)-1.32%
Max Revenue beat(4)0.78%
Revenue beat(8)3
Avg Revenue beat(8)-0.91%
Revenue beat(12)4
Avg Revenue beat(12)0.7%
Revenue beat(16)6
Avg Revenue beat(16)-3.38%
PT rev (1m)6.55%
PT rev (3m)8.4%
EPS NQ rev (1m)2.23%
EPS NQ rev (3m)6.18%
EPS NY rev (1m)-0.56%
EPS NY rev (3m)5.86%
Revenue NQ rev (1m)1.66%
Revenue NQ rev (3m)3.46%
Revenue NY rev (1m)2.74%
Revenue NY rev (3m)3.57%
Valuation
Industry RankSector Rank
PE 12.63
Fwd PE 11.57
P/S 3.89
P/FCF 13.97
P/OCF 10.91
P/B 5.4
P/tB N/A
EV/EBITDA 10.06
EPS(TTM)8.31
EY7.92%
EPS(NY)9.08
Fwd EY8.65%
FCF(TTM)7.52
FCFY7.16%
OCF(TTM)9.62
OCFY9.16%
SpS26.96
BVpS19.43
TBVpS-7.12
PEG (NY)1.12
PEG (5Y)1.55
Profitability
Industry RankSector Rank
ROA 12.87%
ROE 33.51%
ROCE 25.54%
ROIC 23.17%
ROICexc 25.87%
ROICexgc 181.05%
OM 32.76%
PM (TTM) 24.15%
GM 75.69%
FCFM 27.88%
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 RankSector Rank
Debt/Equity 0.61
Debt/FCF 2.1
Debt/EBITDA 0.99
Cap/Depr 70.27%
Cap/Sales 7.8%
Interest Coverage 18.56
Cash Conversion 81.35%
Profit Quality 115.46%
Current Ratio 0.79
Quick Ratio 0.61
Altman-Z 3.61
F-Score6
WACC4.85%
ROIC/WACC4.78
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)18.6%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%26.67%
EPS Next Y11.31%
EPS Next 2Y7.7%
EPS Next 3Y7.64%
EPS Next 5Y4.47%
Revenue 1Y (TTM)11.57%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%11.87%
Revenue Next Year7.74%
Revenue Next 2Y4.8%
Revenue Next 3Y4.01%
Revenue Next 5Y2.73%
EBIT growth 1Y54.44%
EBIT growth 3Y14.18%
EBIT growth 5Y7.57%
EBIT Next Year30.47%
EBIT Next 3Y12.19%
EBIT Next 5Y8.66%
FCF growth 1Y11.95%
FCF growth 3Y4.49%
FCF growth 5Y3.96%
OCF growth 1Y22.23%
OCF growth 3Y5.34%
OCF growth 5Y5.28%