Novartis reported first-quarter results ahead of our expectations, and we've increased our fair value estimate to $105 (CHF 96 local share class) from $98 (CHF 88). Strong top-line growth combined with core margin expansion sets up the company well to meet management’s raised 2024 guidance of low-double-digit to midteens earnings growth.
Novartis' solid late-stage pipeline should propel long-term growth. The company should launch several new drugs during the next several years in critical therapeutic areas such as rare diseases and oncology.
The patent loss on multiple sclerosis drug Gilenya creates a significant drag on sales in 2023-24 as generic competition increases.
|
Metric
|
NOVN
|
GSK
|
JNJ
|
|---|---|---|---|
Price/Earnings (Normalized) | 14.58 | 10.66 | 14.07 |
Price/Book Value | 5.08 | 4.80 | 5.14 |
Price/Sales | 4.18 | 2.24 | 4.12 |
Price/Cash Flow | 13.88 | 10.68 | 18.53 |
|
Metric
|
NOVN
|
GSK
|
JNJ
|
|---|---|---|---|
Quick Ratio | 0.88 | 0.59 | 0.91 |
Current Ratio | 1.16 | 0.88 | 1.16 |
Interest Coverage | 10.94 | 9.30 | 18.88 |
|
Metric
|
NOVN
|
GSK
|
JNJ
|
|---|---|---|---|
Return on Assets (Normalized) | 13.39% | 10.54% | 13.98% |
Return on Equity (Normalized) | 31.09% | 50.48% | 35.02% |
Return on Invested Capital (Normalized) | 19.67% | 21.33% | 22.24% |
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Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
LLY
| Eli Lilly and Co | Frtzkckjdb | Prlmc | $697.4 Bil | |
JNJ
| Johnson & Johnson | Zknfzsffy | Rssn | $353.8 Bil | |
MRK
| Merck & Co Inc | Zftdkxcl | Nrnx | $332.3 Bil | |
ABBV
| AbbVie Inc | Cprvdrsb | Zxyc | $282.6 Bil | |
AZN
| AstraZeneca PLC ADR | Cfpxgnvgs | Gjsh | $232.3 Bil | |
NVS
| Novartis AG ADR | Gqxcgxcq | Nqxyz | $200.1 Bil | |
RHHBY
| Roche Holding AG ADR | Pympqxpkkd | Jczv | $195.3 Bil | |
AMGN
| Amgen Inc | Kmbzyjvfc | Dwwlt | $144.5 Bil | |
PFE
| Pfizer Inc | Vxdbfqqn | Cmgx | $143.8 Bil | |
SNY
| Sanofi SA ADR | Shwyyjj | Wzrh | $122.2 Bil |
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