NOVARTIS AG-SPONSORED ADR (NVS) Stock Fundamental Analysis
NYSE:NVS - New York Stock Exchange, Inc. - US66987V1098 - ADR
NVS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 195 industry peers in the Pharmaceuticals industry. NVS gets an excellent profitability rating and is at the same time showing great financial health properties. NVS scores decently on growth, while it is valued quite cheap. This could make an interesting combination. NVS also has an excellent dividend rating. These ratings could make NVS a good candidate for value and dividend 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.
NVS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NVS has a Return On Assets of 18.66%. This is amongst the best in the industry. NVS outperforms 98.39% of its industry peers.
NVS has a better Return On Equity (44.37%) than 96.77% of its industry peers.
The Return On Invested Capital of NVS (20.91%) is better than 96.24% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NVS is significantly below the industry average of 43.99%.
The 3 year average ROIC (11.23%) for NVS is below the current ROIC(20.91%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.66% | ||
| ROE | 44.37% | ||
| ROIC | 20.91% |
ROA(3y)13%
ROA(5y)11.05%
ROE(3y)26.35%
ROE(5y)22.89%
ROIC(3y)11.23%
ROIC(5y)11.01%
1.3 Margins
The Profit Margin of NVS (35.25%) is better than 97.31% of its industry peers.
In the last couple of years the Profit Margin of NVS has grown nicely.
The Operating Margin of NVS (30.55%) is better than 94.09% of its industry peers.
In the last couple of years the Operating Margin of NVS has grown nicely.
NVS has a better Gross Margin (74.99%) than 81.72% of its industry peers.
In the last couple of years the Gross Margin of NVS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.55% | ||
| PM (TTM) | 35.25% | ||
| GM | 74.99% |
OM growth 3Y3.15%
OM growth 5Y4.74%
PM growth 3Y25.3%
PM growth 5Y3.04%
GM growth 3Y1.43%
GM growth 5Y1.03%
2. Health
2.1 Basic Checks
NVS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
NVS has less shares outstanding than it did 1 year ago.
NVS has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, NVS has a worse debt to assets ratio.
2.2 Solvency
NVS has an Altman-Z score of 3.74. This indicates that NVS is financially healthy and has little risk of bankruptcy at the moment.
NVS's Altman-Z score of 3.74 is fine compared to the rest of the industry. NVS outperforms 76.34% of its industry peers.
NVS has a debt to FCF ratio of 2.07. This is a good value and a sign of high solvency as NVS would need 2.07 years to pay back of all of its debts.
NVS has a better Debt to FCF ratio (2.07) than 94.09% of its industry peers.
NVS has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.47, NVS is doing worse than 63.44% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for NVS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 2.07 | ||
| Altman-Z | 3.74 |
ROIC/WACC4.49
WACC4.66%
2.3 Liquidity
NVS has a Current Ratio of 0.90. This is a bad value and indicates that NVS is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.90, NVS is doing worse than 88.17% of the companies in the same industry.
NVS has a Quick Ratio of 0.90. 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 has a worse Quick ratio (0.71) than 89.78% 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 | 0.9 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.82% over the past year.
The Earnings Per Share has been growing slightly by 6.11% on average over the past years.
Looking at the last year, NVS shows a very negative growth in Revenue. The Revenue has decreased by -18.26% in the last year.
Measured over the past years, NVS shows a small growth in Revenue. The Revenue has been growing by 0.28% on average per year.
EPS 1Y (TTM)6.82%
EPS 3Y6.08%
EPS 5Y6.11%
EPS Q2Q%12.57%
Revenue 1Y (TTM)-18.26%
Revenue growth 3Y-2.21%
Revenue growth 5Y0.28%
Sales Q2Q%8.84%
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 6.84% on average per year.
The Revenue is expected to grow by 3.33% on average over the next years.
EPS Next Y11.87%
EPS Next 2Y9.87%
EPS Next 3Y8.83%
EPS Next 5Y6.84%
Revenue Next Year7.89%
Revenue Next 2Y6.11%
Revenue Next 3Y4.64%
Revenue Next 5Y3.33%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 13.37 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 90.86% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of NVS to the average of the S&P500 Index (28.29), we can say NVS is valued rather cheaply.
With a Price/Forward Earnings ratio of 11.81, the valuation of NVS can be described as very reasonable.
85.48% of the companies in the same industry are more expensive than NVS, based on the Price/Forward Earnings ratio.
NVS's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.37 | ||
| Fwd PE | 11.81 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NVS is valued cheaper than 85.48% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, NVS is valued cheaply inside the industry as 89.25% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.16 | ||
| EV/EBITDA | 9.98 |
4.3 Compensation for Growth
The 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)1.13
PEG (5Y)2.19
EPS Next 2Y9.87%
EPS Next 3Y8.83%
5. Dividend
5.1 Amount
NVS has a Yearly Dividend Yield of 3.64%.
Compared to an average industry Dividend Yield of 4.09, NVS pays a better dividend. On top of this NVS pays more dividend than 94.09% of the companies listed in the same industry.
NVS's Dividend Yield is rather good when compared to the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.64% |
5.2 History
The dividend of NVS has a limited annual growth rate of 2.97%.
NVS has paid a dividend for at least 10 years, which is a reliable track record.
NVS has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)2.97%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
NVS pays out 43.31% 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.
DP43.31%
EPS Next 2Y9.87%
EPS Next 3Y8.83%
NOVARTIS AG-SPONSORED ADR
NYSE:NVS (1/21/2025, 8:17:50 PM)
After market: 98.8 -0.93 (-0.93%)99.73
+2.2 (+2.26%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners39.02%
Inst Owner Change-0.21%
Ins Owners0.01%
Ins Owner ChangeN/A
Market Cap199.39B
Analysts69.66
Price Target117.9 (18.22%)
Short Float %0.23%
Short Ratio3.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.64% |
Yearly Dividend3.48
Dividend Growth(5Y)2.97%
DP43.31%
Div Incr Years4
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.51%
Min EPS beat(2)3.24%
Max EPS beat(2)3.78%
EPS beat(4)3
Avg EPS beat(4)1.25%
Min EPS beat(4)-7.44%
Max EPS beat(4)5.4%
EPS beat(8)7
Avg EPS beat(8)3.78%
EPS beat(12)8
Avg EPS beat(12)2.38%
EPS beat(16)10
Avg EPS beat(16)1.72%
Revenue beat(2)0
Avg Revenue beat(2)-1.05%
Min Revenue beat(2)-1.32%
Max Revenue beat(2)-0.78%
Revenue beat(4)1
Avg Revenue beat(4)-1.46%
Min Revenue beat(4)-4.78%
Max Revenue beat(4)1.02%
Revenue beat(8)3
Avg Revenue beat(8)-0.81%
Revenue beat(12)3
Avg Revenue beat(12)-0.86%
Revenue beat(16)5
Avg Revenue beat(16)-0.45%
PT rev (1m)-2.1%
PT rev (3m)-4.45%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.06%
EPS NY rev (1m)0%
EPS NY rev (3m)1.65%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.81%
Revenue NY rev (1m)0.31%
Revenue NY rev (3m)1.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.37 | ||
| Fwd PE | 11.81 | ||
| P/S | 3.99 | ||
| P/FCF | 15.16 | ||
| P/OCF | 12 | ||
| P/B | 5.03 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.98 |
EPS(TTM)7.46
EY7.48%
EPS(NY)8.44
Fwd EY8.47%
FCF(TTM)6.58
FCFY6.6%
OCF(TTM)8.31
OCFY8.34%
SpS24.98
BVpS19.84
TBVpS-4.83
PEG (NY)1.13
PEG (5Y)2.19
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.66% | ||
| ROE | 44.37% | ||
| ROCE | 23.46% | ||
| ROIC | 20.91% | ||
| ROICexc | 24.55% | ||
| ROICexgc | 224.21% | ||
| OM | 30.55% | ||
| PM (TTM) | 35.25% | ||
| GM | 74.99% | ||
| FCFM | 26.34% |
ROA(3y)13%
ROA(5y)11.05%
ROE(3y)26.35%
ROE(5y)22.89%
ROIC(3y)11.23%
ROIC(5y)11.01%
ROICexc(3y)14.26%
ROICexc(5y)13.39%
ROICexgc(3y)76.79%
ROICexgc(5y)62.36%
ROCE(3y)13.16%
ROCE(5y)13.01%
ROICexcg growth 3Y23.14%
ROICexcg growth 5Y25.98%
ROICexc growth 3Y13.69%
ROICexc growth 5Y16.56%
OM growth 3Y3.15%
OM growth 5Y4.74%
PM growth 3Y25.3%
PM growth 5Y3.04%
GM growth 3Y1.43%
GM growth 5Y1.03%
F-Score5
Asset Turnover0.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 2.07 | ||
| Debt/EBITDA | 0.88 | ||
| Cap/Depr | 57.49% | ||
| Cap/Sales | 6.94% | ||
| Interest Coverage | 17.36 | ||
| Cash Conversion | 78.08% | ||
| Profit Quality | 74.73% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 3.74 |
F-Score5
WACC4.66%
ROIC/WACC4.49
Cap/Depr(3y)39.69%
Cap/Depr(5y)39.56%
Cap/Sales(3y)6.27%
Cap/Sales(5y)5.73%
Profit Quality(3y)98.49%
Profit Quality(5y)105.89%
High Growth Momentum
Growth
EPS 1Y (TTM)6.82%
EPS 3Y6.08%
EPS 5Y6.11%
EPS Q2Q%12.57%
EPS Next Y11.87%
EPS Next 2Y9.87%
EPS Next 3Y8.83%
EPS Next 5Y6.84%
Revenue 1Y (TTM)-18.26%
Revenue growth 3Y-2.21%
Revenue growth 5Y0.28%
Sales Q2Q%8.84%
Revenue Next Year7.89%
Revenue Next 2Y6.11%
Revenue Next 3Y4.64%
Revenue Next 5Y3.33%
EBIT growth 1Y-4.16%
EBIT growth 3Y0.87%
EBIT growth 5Y5.03%
EBIT Next Year45.15%
EBIT Next 3Y17.08%
EBIT Next 5Y11.67%
FCF growth 1Y19.5%
FCF growth 3Y1.89%
FCF growth 5Y0.14%
OCF growth 1Y18.65%
OCF growth 3Y1.94%
OCF growth 5Y0.26%