NOVARTIS AG-SPONSORED ADR (NVS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NVS - US66987V1098 - ADR
132.28 USD
+3.31 (+2.57%)
132.25 USD
-0.03 (-0.02%)
Overall NVS gets a fundamental rating of 8 out of 10. We evaluated NVS against 192 industry peers in the Pharmaceuticals industry. NVS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. A decent growth rate in combination with a cheap valuation! Better keep an eye on NVS. 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
NVS had positive earnings in the past year.
In the past year NVS had a positive cash flow from operations.
Each year in the past 5 years NVS has been profitable.
NVS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NVS has a better Return On Assets (13.42%) than 94.79% of its industry peers.
With an excellent Return On Equity value of 32.47%, NVS belongs to the best of the industry, outperforming 94.79% of the companies in the same industry.
NVS's Return On Invested Capital of 22.36% is amongst the best of the industry. NVS outperforms 97.40% of its industry peers.
NVS had an Average Return On Invested Capital over the past 3 years of 14.58%. This is in line with the industry average of 12.71%.
The 3 year average ROIC (14.58%) for NVS is below the current ROIC(22.36%), indicating increased profibility in the last year.
| 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
Looking at the Profit Margin, with a value of 25.69%, NVS belongs to the top of the industry, outperforming 92.71% of the companies in the same industry.
In the last couple of years the Profit Margin of NVS has remained more or less at the same level.
Looking at the Operating Margin, with a value of 33.11%, NVS belongs to the top of the industry, outperforming 94.79% of the companies in the same industry.
In the last couple of years the Operating Margin of NVS has grown nicely.
The Gross Margin of NVS (76.10%) is better than 81.25% 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
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.
The number of shares outstanding for NVS has been reduced compared to 5 years ago.
Compared to 1 year ago, NVS has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.98 indicates that NVS is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.98, NVS is doing good in the industry, outperforming 72.40% of the companies in the same industry.
NVS has a debt to FCF ratio of 1.87. This is a very positive value and a sign of high solvency as it would only need 1.87 years to pay back of all of its debts.
NVS has a Debt to FCF ratio of 1.87. This is amongst the best in the industry. NVS outperforms 93.23% of its industry peers.
NVS has a Debt/Equity ratio of 0.55. This is a neutral value indicating NVS is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.55, NVS is not doing good in the industry: 64.06% of the companies in the same industry are doing better.
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 | 3.98 |
ROIC/WACC4.73
WACC4.73%
2.3 Liquidity
NVS has a Current Ratio of 0.88. This is a bad value and indicates that NVS is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.88, NVS is not doing good in the industry: 87.50% of the companies in the same industry are doing better.
A Quick Ratio of 0.68 indicates that NVS may have some problems paying its short term obligations.
NVS has a worse Quick ratio (0.68) than 88.02% of its industry peers.
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.
The Revenue has grown by 12.18% in the past year. This is quite good.
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
The Earnings Per Share is expected to grow by 9.35% on average over the next years. This is quite good.
NVS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.35% yearly.
EPS Next Y16.95%
EPS Next 2Y9.93%
EPS Next 3Y9.61%
EPS Next 5Y9.35%
Revenue Next Year9.97%
Revenue Next 2Y6.25%
Revenue Next 3Y5.34%
Revenue Next 5Y5.35%
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
Based on the Price/Earnings ratio of 14.65, the valuation of NVS can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of NVS indicates a rather cheap valuation: NVS is cheaper than 86.98% of the companies listed in the same industry.
NVS is valuated rather cheaply when we compare the Price/Earnings ratio to 26.15, which is the current average of the S&P500 Index.
NVS is valuated correctly with a Price/Forward Earnings ratio of 13.86.
Based on the Price/Forward Earnings ratio, NVS is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of NVS to the average of the S&P500 Index (36.22), we can say NVS is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.65 | ||
| Fwd PE | 13.86 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NVS indicates a rather cheap valuation: NVS is cheaper than 84.90% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NVS indicates a rather cheap valuation: NVS is cheaper than 86.46% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.88 | ||
| EV/EBITDA | 11.26 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of NVS may justify a higher PE ratio.
PEG (NY)0.86
PEG (5Y)1.8
EPS Next 2Y9.93%
EPS Next 3Y9.61%
5. Dividend
5.1 Amount
NVS has a Yearly Dividend Yield of 3.34%.
Compared to an average industry Dividend Yield of 6.81, NVS pays a better dividend. On top of this NVS pays more dividend than 95.31% of the companies listed in the same industry.
NVS's Dividend Yield is a higher than the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.34% |
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.
As NVS did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)5.49%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
54.32% of the earnings are spent on dividend by NVS. 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.
DP54.32%
EPS Next 2Y9.93%
EPS Next 3Y9.61%
132.28
+3.31 (+2.57%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners39.6%
Inst Owner Change0.43%
Ins Owners0.01%
Ins Owner ChangeN/A
Market Cap253.82B
Revenue(TTM)56.02B
Net Income(TTM)14.39B
Analysts69.03
Price Target135.04 (2.09%)
Short Float %0.31%
Short Ratio3.22
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.34% |
Yearly Dividend3.79
Dividend Growth(5Y)5.49%
DP54.32%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.71%
Min EPS beat(2)-2.03%
Max EPS beat(2)0.61%
EPS beat(4)3
Avg EPS beat(4)2.81%
Min EPS beat(4)-2.03%
Max EPS beat(4)6.59%
EPS beat(8)6
Avg EPS beat(8)2.03%
EPS beat(12)10
Avg EPS beat(12)3.45%
EPS beat(16)11
Avg EPS beat(16)2.48%
Revenue beat(2)0
Avg Revenue beat(2)-2.83%
Min Revenue beat(2)-2.84%
Max Revenue beat(2)-2.82%
Revenue beat(4)1
Avg Revenue beat(4)-1.5%
Min Revenue beat(4)-2.84%
Max Revenue beat(4)0.78%
Revenue beat(8)2
Avg Revenue beat(8)-1.48%
Revenue beat(12)3
Avg Revenue beat(12)-3.77%
Revenue beat(16)4
Avg Revenue beat(16)-4.02%
PT rev (1m)1.58%
PT rev (3m)3.97%
EPS NQ rev (1m)-0.97%
EPS NQ rev (3m)0.24%
EPS NY rev (1m)1.55%
EPS NY rev (3m)0.42%
Revenue NQ rev (1m)-0.78%
Revenue NQ rev (3m)0.41%
Revenue NY rev (1m)0.35%
Revenue NY rev (3m)0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.65 | ||
| Fwd PE | 13.86 | ||
| P/S | 4.53 | ||
| P/FCF | 14.88 | ||
| P/OCF | 12.04 | ||
| P/B | 5.73 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.26 |
EPS(TTM)9.03
EY6.83%
EPS(NY)9.54
Fwd EY7.21%
FCF(TTM)8.89
FCFY6.72%
OCF(TTM)10.98
OCFY8.3%
SpS29.2
BVpS23.1
TBVpS-5.35
PEG (NY)0.86
PEG (5Y)1.8
Graham Number68.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.42% | ||
| ROE | 32.47% | ||
| ROCE | 24.64% | ||
| ROIC | 22.36% | ||
| ROICexc | 25.65% | ||
| ROICexgc | 152.58% | ||
| OM | 33.11% | ||
| PM (TTM) | 25.69% | ||
| GM | 76.1% | ||
| FCFM | 30.45% |
ROA(3y)10.82%
ROA(5y)11.4%
ROE(3y)23.55%
ROE(5y)24.08%
ROIC(3y)14.58%
ROIC(5y)12.83%
ROICexc(3y)17.82%
ROICexc(5y)15.74%
ROICexgc(3y)90.48%
ROICexgc(5y)78.58%
ROCE(3y)16.96%
ROCE(5y)14.93%
ROICexgc growth 3Y14.29%
ROICexgc growth 5Y25.26%
ROICexc growth 3Y20.9%
ROICexc growth 5Y13.17%
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%
F-Score7
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 1.87 | ||
| Debt/EBITDA | 1.01 | ||
| Cap/Depr | 74.31% | ||
| Cap/Sales | 7.16% | ||
| Interest Coverage | 18.85 | ||
| Cash Conversion | 87.98% | ||
| Profit Quality | 118.52% | ||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 3.98 |
F-Score7
WACC4.73%
ROIC/WACC4.73
Cap/Depr(3y)51.13%
Cap/Depr(5y)48.4%
Cap/Sales(3y)6.48%
Cap/Sales(5y)6.27%
Profit Quality(3y)120.24%
Profit Quality(5y)109.63%
High Growth Momentum
Growth
EPS 1Y (TTM)21.33%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%9.22%
EPS Next Y16.95%
EPS Next 2Y9.93%
EPS Next 3Y9.61%
EPS Next 5Y9.35%
Revenue 1Y (TTM)12.18%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%8.47%
Revenue Next Year9.97%
Revenue Next 2Y6.25%
Revenue Next 3Y5.34%
Revenue Next 5Y5.35%
EBIT growth 1Y21.58%
EBIT growth 3Y14.18%
EBIT growth 5Y7.57%
EBIT Next Year34.89%
EBIT Next 3Y12.7%
EBIT Next 5Y13.76%
FCF growth 1Y33.72%
FCF growth 3Y4.49%
FCF growth 5Y3.96%
OCF growth 1Y37.07%
OCF growth 3Y5.34%
OCF growth 5Y5.28%
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 8 / 10 to NVS.
Can you provide the valuation status for NOVARTIS AG-SPONSORED ADR?
ChartMill assigns a valuation rating of 8 / 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.
What are the PE and PB ratios of NOVARTIS AG-SPONSORED ADR (NVS) stock?
The Price/Earnings (PE) ratio for NOVARTIS AG-SPONSORED ADR (NVS) is 14.65 and the Price/Book (PB) ratio is 5.73.
What is the earnings growth outlook for NOVARTIS AG-SPONSORED ADR?
The Earnings per Share (EPS) of NOVARTIS AG-SPONSORED ADR (NVS) is expected to grow by 16.95% in the next year.