NOVARTIS AG-SPONSORED ADR (NVS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NVS - US66987V1098 - ADR
136.06 USD
+0.79 (+0.58%)
136.06 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to NVS. NVS was compared to 192 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 Finally NVS also has an excellent dividend rating. With these ratings, NVS could be worth investigating further for value and dividend and quality investing!.
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.
In the past 5 years NVS has always been profitable.
In the past 5 years NVS always reported a positive cash flow from operatings.
1.2 Ratios
NVS has a Return On Assets of 13.42%. This is amongst the best in the industry. NVS outperforms 94.27% of its industry peers.
The Return On Equity of NVS (32.47%) is better than 94.27% of its industry peers.
The Return On Invested Capital of NVS (22.36%) is better than 97.40% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NVS is in line with the industry average of 12.85%.
The last Return On Invested Capital (22.36%) for NVS is above the 3 year average (14.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.42% | ||
| ROE | 32.47% | ||
| ROIC | 22.36% |
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
The Profit Margin of NVS (25.69%) is better than 92.19% of its industry peers.
NVS's Profit Margin has been stable in the last couple of years.
The Operating Margin of NVS (33.11%) is better than 94.79% of its industry peers.
NVS's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 76.10%, NVS belongs to the top of the industry, outperforming 81.77% of the companies in the same industry.
NVS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.11% | ||
| PM (TTM) | 25.69% | ||
| GM | 76.1% |
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.
The number of shares outstanding for NVS has been reduced compared to 1 year ago.
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.
2.2 Solvency
An Altman-Z score of 4.11 indicates that NVS is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.11, NVS is in the better half of the industry, outperforming 71.35% of the companies in the same industry.
NVS has a debt to FCF ratio of 1.87. This is a very positive value and a sign of high solvency as it would only need 1.87 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.87, NVS belongs to the top of the industry, outperforming 94.27% of the companies in the same industry.
A Debt/Equity ratio of 0.55 indicates that NVS is somewhat dependend on debt financing.
NVS's Debt to Equity ratio of 0.55 is on the low side compared to the rest of the industry. NVS is outperformed by 65.10% 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 1.87 | ||
| Altman-Z | 4.11 |
ROIC/WACC4.45
WACC5.02%
2.3 Liquidity
NVS has a Current Ratio of 0.88. This is a bad value and indicates that NVS is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of NVS (0.88) is worse than 87.50% of its industry peers.
NVS has a Quick Ratio of 0.88. This is a bad value and indicates that NVS is not financially healthy enough and could expect problems in meeting its short term obligations.
NVS's Quick ratio of 0.68 is on the low side compared to the rest of the industry. NVS is outperformed by 86.98% 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 | 0.88 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
NVS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.33%, which is quite impressive.
The Earnings Per Share has been growing by 8.14% on average over the past years. This is quite good.
Looking at the last year, NVS shows a quite strong growth in Revenue. The Revenue has grown by 12.18% in the last year.
NVS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.24% yearly.
EPS 1Y (TTM)21.33%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%9.22%
Revenue 1Y (TTM)12.18%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%8.47%
3.2 Future
The Earnings Per Share is expected to grow by 9.35% on average over the next years. This is quite good.
Based on estimates for the next years, NVS will show a small growth in Revenue. The Revenue will grow by 5.35% on average per year.
EPS Next Y16.69%
EPS Next 2Y9.51%
EPS Next 3Y8.79%
EPS Next 5Y9.35%
Revenue Next Year9.86%
Revenue Next 2Y6.25%
Revenue Next 3Y5.47%
Revenue Next 5Y5.35%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 15.07 indicates a correct valuation of NVS.
Compared to the rest of the industry, the Price/Earnings ratio of NVS indicates a rather cheap valuation: NVS is cheaper than 86.46% of the companies listed in the same industry.
NVS is valuated rather cheaply when we compare the Price/Earnings ratio to 26.39, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 14.37, which indicates a correct valuation of NVS.
Based on the Price/Forward Earnings ratio, NVS is valued cheaply inside the industry as 81.77% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 23.84. NVS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.07 | ||
| Fwd PE | 14.37 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NVS is valued cheaper than 84.38% of the companies in the same industry.
NVS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. NVS is cheaper than 86.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.3 | ||
| EV/EBITDA | 11.82 |
4.3 Compensation for Growth
NVS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of NVS may justify a higher PE ratio.
PEG (NY)0.9
PEG (5Y)1.85
EPS Next 2Y9.51%
EPS Next 3Y8.79%
5. Dividend
5.1 Amount
NVS has a Yearly Dividend Yield of 3.25%. 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 0.45. NVS pays more dividend than 94.27% of the companies in the same industry.
NVS's Dividend Yield is rather good when compared to the S&P500 average which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.25% |
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 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 54.32% 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.
DP54.32%
EPS Next 2Y9.51%
EPS Next 3Y8.79%
136.06
+0.79 (+0.58%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners41.28%
Inst Owner Change0.44%
Ins Owners0.01%
Ins Owner ChangeN/A
Market Cap261.07B
Revenue(TTM)56.02B
Net Income(TTM)14.39B
Analysts70.32
Price Target135.04 (-0.75%)
Short Float %0.29%
Short Ratio2.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.25% |
Yearly Dividend3.79
Dividend Growth(5Y)5.49%
DP54.32%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.71%
Min EPS beat(2)-2.03%
Max EPS beat(2)0.61%
EPS beat(4)3
Avg EPS beat(4)2.81%
Min EPS beat(4)-2.03%
Max EPS beat(4)6.59%
EPS beat(8)6
Avg EPS beat(8)2.03%
EPS beat(12)10
Avg EPS beat(12)3.45%
EPS beat(16)11
Avg EPS beat(16)2.48%
Revenue beat(2)0
Avg Revenue beat(2)-2.83%
Min Revenue beat(2)-2.84%
Max Revenue beat(2)-2.82%
Revenue beat(4)1
Avg Revenue beat(4)-1.5%
Min Revenue beat(4)-2.84%
Max Revenue beat(4)0.78%
Revenue beat(8)2
Avg Revenue beat(8)-1.48%
Revenue beat(12)3
Avg Revenue beat(12)-3.77%
Revenue beat(16)4
Avg Revenue beat(16)-4.02%
PT rev (1m)2.37%
PT rev (3m)-0.14%
EPS NQ rev (1m)-0.49%
EPS NQ rev (3m)0.44%
EPS NY rev (1m)-0.22%
EPS NY rev (3m)0.2%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)0.73%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.07 | ||
| Fwd PE | 14.37 | ||
| P/S | 4.66 | ||
| P/FCF | 15.3 | ||
| P/OCF | 12.39 | ||
| P/B | 5.89 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.82 |
EPS(TTM)9.03
EY6.64%
EPS(NY)9.47
Fwd EY6.96%
FCF(TTM)8.89
FCFY6.53%
OCF(TTM)10.98
OCFY8.07%
SpS29.2
BVpS23.1
TBVpS-5.35
PEG (NY)0.9
PEG (5Y)1.85
Graham Number68.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.42% | ||
| ROE | 32.47% | ||
| ROCE | 24.64% | ||
| ROIC | 22.36% | ||
| ROICexc | 25.65% | ||
| ROICexgc | 152.58% | ||
| OM | 33.11% | ||
| PM (TTM) | 25.69% | ||
| GM | 76.1% | ||
| FCFM | 30.45% |
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%
ROICexgc growth 3Y14.29%
ROICexgc 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-Score7
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 1.87 | ||
| Debt/EBITDA | 1.01 | ||
| Cap/Depr | 74.31% | ||
| Cap/Sales | 7.16% | ||
| Interest Coverage | 18.85 | ||
| Cash Conversion | 87.98% | ||
| Profit Quality | 118.52% | ||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 4.11 |
F-Score7
WACC5.02%
ROIC/WACC4.45
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)21.33%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%9.22%
EPS Next Y16.69%
EPS Next 2Y9.51%
EPS Next 3Y8.79%
EPS Next 5Y9.35%
Revenue 1Y (TTM)12.18%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%8.47%
Revenue Next Year9.86%
Revenue Next 2Y6.25%
Revenue Next 3Y5.47%
Revenue Next 5Y5.35%
EBIT growth 1Y21.58%
EBIT growth 3Y14.18%
EBIT growth 5Y7.57%
EBIT Next Year36.14%
EBIT Next 3Y13.19%
EBIT Next 5Y13.76%
FCF growth 1Y33.72%
FCF growth 3Y4.49%
FCF growth 5Y3.96%
OCF growth 1Y37.07%
OCF growth 3Y5.34%
OCF growth 5Y5.28%
NOVARTIS AG-SPONSORED ADR / NVS FAQ
What is the ChartMill fundamental rating of NOVARTIS AG-SPONSORED ADR (NVS) stock?
ChartMill assigns a fundamental rating of 7 / 10 to NVS.
Can you provide the valuation status for NOVARTIS AG-SPONSORED ADR?
ChartMill assigns a valuation rating of 7 / 10 to NOVARTIS AG-SPONSORED ADR (NVS). This can be considered as Undervalued.
How profitable is NOVARTIS AG-SPONSORED ADR (NVS) stock?
NOVARTIS AG-SPONSORED ADR (NVS) has a profitability rating of 9 / 10.
What are the PE and PB ratios of NOVARTIS AG-SPONSORED ADR (NVS) stock?
The Price/Earnings (PE) ratio for NOVARTIS AG-SPONSORED ADR (NVS) is 15.07 and the Price/Book (PB) ratio is 5.89.
What is the earnings growth outlook for NOVARTIS AG-SPONSORED ADR?
The Earnings per Share (EPS) of NOVARTIS AG-SPONSORED ADR (NVS) is expected to grow by 16.69% in the next year.