Fact based stock research
Novartis (SWX:NOVN)
CH0012005267
How to read the free ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Novartis stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 8 (worse than 92% compared with investment alternatives), Novartis (Pharmaceuticals, Switzerland) shares have lower financial characteristics compared with similar stocks. Shares of Novartis are low in value (priced high) with a consolidated Value Rank of 42 (worse than 58% of alternatives), and are riskily financed (Safety Rank of 8, which means above-average debt burdens) but show above-average growth (Growth Rank of 56). ...read more
RECOMMENDATION: A Combined Rank of 8, is a sell recommendation based on Novartis's financial characteristics. As the company Novartis shows low value with an Obermatt Value Rank of 42 (58% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 56% of comparable companies (Obermatt Growth Rank is 56). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 8 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Novartis, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | Switzerland |
| Industry | Pharmaceuticals |
| Index | Dividends Europe, Diversity Europe, Moonshot Tech, SPI, SMI |
| Size class | XX-Large |
This stock has achievements: Gold Winner CEO, Insight 2016-03-25, Top 10 Stock.
26-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.
Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Novartis
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 46 |
|
74 |
|
53 |
|
42 |
|
| GROWTH | ||||||||
| GROWTH | 39 |
|
39 |
|
25 |
|
56 |
|
| SAFETY | ||||||||
| SAFETY | 19 |
|
10 |
|
22 |
|
8 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
68 |
|
84 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
36 |
|
37 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 8 (worse than 92% compared with investment alternatives), Novartis (Pharmaceuticals, Switzerland) shares have lower financial characteristics compared with similar stocks. Shares of Novartis are low in value (priced high) with a consolidated Value Rank of 42 (worse than 58% of alternatives), and are riskily financed (Safety Rank of 8, which means above-average debt burdens) but show above-average growth (Growth Rank of 56). ...read more
RECOMMENDATION: A Combined Rank of 8, is a sell recommendation based on Novartis's financial characteristics. As the company Novartis shows low value with an Obermatt Value Rank of 42 (58% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 56% of comparable companies (Obermatt Growth Rank is 56). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 8 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Novartis, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 46 |
|
74 |
|
53 |
|
42 |
|
| GROWTH | ||||||||
| GROWTH | 39 |
|
39 |
|
25 |
|
56 |
|
| SAFETY | ||||||||
| SAFETY | 19 |
|
10 |
|
22 |
|
8 |
|
| COMBINED | ||||||||
| COMBINED | 11 |
|
26 |
|
8 |
|
8 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 42 (worse than 58% compared with alternatives), Novartis shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Novartis. Price-to-Profit (also referred to as price-earnings, P/E) is 65 which means that the stock price compared with what market professionals expect for future profits is lower than for 65% of comparable companies, indicating a good value concerning Novartis's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 15, which means that the stock price is lower as regards to invested capital than for 15% of comparable investments. On the other hand, Price-to-Sales is less favorable than 83% of alternatives (only 17% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 16% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 42, is a hold recommendation based on Novartis's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 32 |
|
48 |
|
24 |
|
17 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 56 |
|
75 |
|
59 |
|
65 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 38 |
|
55 |
|
26 |
|
15 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 86 |
|
90 |
|
90 |
|
84 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 46 |
|
74 |
|
53 |
|
42 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 56 (better than 56% compared with alternatives), Novartis shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Novartis. Profit Growth has a rank of 50 which means that currently professionals expect the company to grow its profits more than 50% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 83, and Stock Returns has a rank of 64 which means that the stock returns have recently been above 64% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 30 (70% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 56, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 48 |
|
26 |
|
6 |
|
30 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 48 |
|
43 |
|
48 |
|
50 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
63 |
|
31 |
|
83 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 30 |
|
52 |
|
62 |
|
64 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 39 |
|
39 |
|
25 |
|
56 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 8 (better than 8% compared with alternatives), the company Novartis has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Novartis is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Novartis. Liquidity is at 53, meaning the company generates more profit to service its debt than 53% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 14, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 86% of its competitors. Leverage is also high at a rank of 27, which means that the company has an above-average debt-to-equity ratio. It has more debt than 73% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 8 (worse than 92% compared with alternatives), Novartis has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 43 |
|
19 |
|
40 |
|
27 |
|
| REFINANCING | ||||||||
| REFINANCING | 16 |
|
1 |
|
9 |
|
14 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 48 |
|
54 |
|
55 |
|
53 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 19 |
|
10 |
|
22 |
|
8 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
33 |
|
34 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
49 |
|
87 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
92 |
|
70 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
47 |
|
61 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
68 |
|
84 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Novartis from December 26, 2024.
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