NOVARTIS AG-SPONSORED ADR (NVS) Stock Fundamental Analysis
USA • New York Stock Exchange • NYSE:NVS • US66987V1098
150.06 USD
+1.38 (+0.93%)
Last: Feb 2, 2026, 09:56 AM
Overall NVS gets a fundamental rating of 7 out of 10. We evaluated NVS against 191 industry peers in the Pharmaceuticals industry. Both the health and profitability get an excellent rating, making NVS a very profitable company, without any liquidiy or solvency issues. NVS scores decently on growth, while it is valued quite cheap. This could make an interesting combination. Finally NVS also has an excellent dividend rating. These ratings would make NVS suitable for value and dividend and quality investing!
1. Profitability
1.1 Basic Checks
- In the past year NVS was profitable.
- In the past year NVS had a positive cash flow from operations.
- NVS had positive earnings in each of the past 5 years.
- In the past 5 years NVS always reported a positive cash flow from operatings.
1.2 Ratios
- NVS has a better Return On Assets (13.42%) than 94.24% of its industry peers.
- NVS's Return On Equity of 32.47% is amongst the best of the industry. NVS outperforms 94.24% of its industry peers.
- NVS's Return On Invested Capital of 22.36% is amongst the best of the industry. NVS outperforms 97.38% 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 12.82%.
- 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
- NVS has a better Profit Margin (25.69%) than 92.15% of its industry peers.
- In the last couple of years the Profit Margin of NVS has remained more or less at the same level.
- The Operating Margin of NVS (33.11%) is better than 94.76% of its industry peers.
- In the last couple of years the Operating Margin of NVS has grown nicely.
- NVS has a better Gross Margin (76.10%) than 82.20% 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 | 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.
- Compared to 1 year ago, NVS has less shares outstanding
- NVS has less shares outstanding than it did 5 years ago.
- NVS has a worse debt/assets ratio than last year.
2.2 Solvency
- NVS has an Altman-Z score of 4.34. This indicates that NVS is financially healthy and has little risk of bankruptcy at the moment.
- With a decent Altman-Z score value of 4.34, NVS is doing good in the industry, outperforming 71.20% of the companies in the same industry.
- The Debt to FCF ratio of NVS is 1.87, which is an excellent value as it means it would take NVS, only 1.87 years of fcf income to pay off all of its debts.
- With an excellent Debt to FCF ratio value of 1.87, NVS belongs to the best of the industry, outperforming 94.24% of the companies in the same industry.
- NVS has a Debt/Equity ratio of 0.55. This is a neutral value indicating 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 65.44% 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 | 4.34 |
ROIC/WACC4.59
WACC4.87%
2.3 Liquidity
- A Current Ratio of 0.88 indicates that NVS may have some problems paying its short term obligations.
- NVS has a worse Current ratio (0.88) than 86.91% of its industry peers.
- A Quick Ratio of 0.68 indicates that NVS may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.68, NVS is doing worse than 86.91% of the companies in the same industry.
- NVS does not score too well on the current and quick ratio evaluation. However, as it has 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.
- Measured over the past years, NVS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.14% on average per year.
- NVS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.18%.
- The Revenue has been growing slightly by 1.24% on average over the past years.
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
- NVS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.79% yearly.
- The Revenue is expected to grow by 5.27% on average over the next years.
EPS Next Y16.8%
EPS Next 2Y9.28%
EPS Next 3Y8.59%
EPS Next 5Y8.79%
Revenue Next Year9.91%
Revenue Next 2Y6.24%
Revenue Next 3Y5.54%
Revenue Next 5Y5.27%
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
- NVS is valuated correctly with a Price/Earnings ratio of 16.62.
- NVS's Price/Earnings ratio is rather cheap when compared to the industry. NVS is cheaper than 84.82% of the companies in the same industry.
- NVS's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.32.
- A Price/Forward Earnings ratio of 15.91 indicates a correct valuation of NVS.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of NVS indicates a rather cheap valuation: NVS is cheaper than 82.72% of the companies listed in the same industry.
- When comparing the Price/Forward Earnings ratio of NVS to the average of the S&P500 Index (25.57), we can say NVS is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.62 | ||
| Fwd PE | 15.91 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, NVS is valued cheaply inside the industry as 84.29% of the companies are valued more expensively.
- NVS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. NVS is cheaper than 86.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.88 | ||
| EV/EBITDA | 12.84 |
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.
- NVS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.99
PEG (5Y)2.04
EPS Next 2Y9.28%
EPS Next 3Y8.59%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.06%, NVS has a reasonable but not impressive dividend return.
- NVS's Dividend Yield is rather good when compared to the industry average which is at 0.62. NVS pays more dividend than 93.72% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.83, NVS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.06% |
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.
- NVS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP54.32%
EPS Next 2Y9.28%
EPS Next 3Y8.59%
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.
What is the valuation status for NVS stock?
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.
How financially healthy is NOVARTIS AG-SPONSORED ADR?
The financial health rating of NOVARTIS AG-SPONSORED ADR (NVS) is 7 / 10.
Is the dividend of NOVARTIS AG-SPONSORED ADR sustainable?
The dividend rating of NOVARTIS AG-SPONSORED ADR (NVS) is 7 / 10 and the dividend payout ratio is 54.32%.