NVS
Novartis Q2 profits recover as revenue mantle passes to newer medicines
Article Summary
HOLD- Novartis AG ADR (NYSE: NOVX) posted modest revenue growth as operating profits exceeded expectations, with core operating income rising to $5.94 billion and sales rising 1% at constant currency to $14.1 billion, beating analyst expectations and returning to flat year-over-year growth in Q2.
- Novartis AG ADR is facing a major portfolio transition as Entresto sales have declined sharply, with the heart failure drug facing generic competition and patent expirations.
- Newer medicines such as Kisqali, Kesimpta, Scemblix, Pluvicto, and Rhapsido are contributing to revenue growth, while cancer and oncology products such as Leqvio and KisQali continue to perform strongly.
- Key launches in Rhapsidio and CSU include a new drug regulatory approval for chronic spontaneous urticaria, with early indications indicating strong early uptake.
- Management reaffirmed 2026 net sales growth guidance, though operating income is expected to decline low-single-digit as legacy products face generic competition.
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Growth Stock Scoring Breakdown
| METRIC | VALUE | WEIGHT | ANALYSIS |
|---|---|---|---|
| Sales Growth TTM ? | 5.6% | 25% | 35.0 ptsBelow Screener (5.6%) - Weak growth |
| EPS Growth Next 5Y ? | 6.1% | 25% | 20.0 ptsWeak (6.1%) - Low expectations |
| Target Price Upside ? | 0.4% | 20% | 10.0 ptsNear/At Target (0.4%) - Target: $153.10 vs Current: $153.69 |
| Gross Margin % ? | 74.6% | 15% | 100.0 ptsExceptional (74.6%) - Strong pricing power |
| Drawdown from 52-Wk High ? | -9.8% | 15% | 20.0 ptsBarely a Dip (-9.8%) - Near recent highs |
Disclaimer: This rating is for informational purposes only and is not financial advice.
All data sourced from Finviz.
Always conduct your own research and consult with a financial advisor before making investment decisions.
Past performance does not guarantee future results.
About NVS
- Novartis AG researches, develops, manufactures, distributes, markets, and sells pharmaceutical medicines in Switzerland and internationally.
- The company offers Entresto, an angiotensin receptorneprilysin inhibitor to treat symptomatic chronic heart failure with reduced ejection fraction (HFrEF); Cosentyx to treat plaque psoriasis, pso riatic arthritis, ankylosing spondylitis, and nonradiographic axial spondy loarthritis; Kisqali, a selective oral cyclin dependent inhibitor of kinases 4 and 6 (CDK4/6); Promacta/Revolade to treat immune thrombocytopenia (ITP), thrombocytopenia, and patients with severe aplastic anemia (SAA); Tafinlar+Mekinist, an oral combination therapy to treat patients with certain types of cancers; and Jakavi for the treatment of myelofibrosis, polycythemia vera, and acute or chronic graftversushost disease (GvHD).
- It also provides Tasigna to treat philadelphia chromosomepositive chronic myeloid leukemia in the chronic and/or accelerated phase; Xolair for the treatment of allergic asthma and nasal polyps or severe chronic rhinosi nusitis with nasal polyps; Ilaris to treat fever syndromes, Still's disease, and acute gouty arthritis; Pluvicto to treat prostatespecific membrane anti genpositive metastatic castrationresistant prostate cancer; Sandostatin SC and Sandostatin LAR to treat acromegaly carcinoid tumors and other types of functional gastro intestinal and pancreatic neuroendocrine tumors; Zolgensma for the treatment of genetic root cause of spinal muscular atrophy; Lucentis; Leqvio to reduce LDL cholesterol; Lutathera; Scemblix; and Fabhalta.
- The company focuses on therapeutic areas, such as cardiovascular, renal and metabolic, immunology, neuroscience, oncology, and hematology.
- It has a license and collaboration agreement with Alnylam Pharmaceuticals, Inc. to develop, manufacture, and commercialize Leqvio (inclisiran), a therapy to reduce LDL cholesterol.
- Novartis AG was incorporated in 1996 and is headquartered in Basel, Switzerland.