Why You Need Novartis AG (NVS) On Your Watchlist

Novartis AG (NYSE:NVS) saw a downside of -0.44% to close Tuesday at $81.98 after subtracting -$0.36 on the day. The 5-day average trading volume is 1,788,660 shares of the company’s common stock. It has gained $83.12 in the past week. An average of 2,222,685 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 2,023,236.

NVS’s 1-month performance is -3.85% or -$3.45 on its low of $81.01 reached on 10/06/21. The company’s shares have touched a 52-week low of $77.04 and high of $98.52, with the stock’s rally to the 52-week high happening on 01/25/21. YTD, NVS has lost -13.18% or -$12.45. However, the current price is down -16.79%% from the 52-week high price.


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Valuation Metrics

The company’s PE ratio for the last five years has touched a high of 32.46 and a low of 12.68. NVS stock has a beta of 0.59. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 3.92 while the price-to-book (PB) in the most recent quarter is 3.40, with the price to cash flow ratio at 43.12.

Novartis AG pays an annual dividend of $2.08 per share. Its dividend yield is 2.54% and the payout ratio is 77.60%. NVS’s most recent quarterly dividend payment was made on Mar. 15, when it paid $3.3784 a share compared with prior rate of $3.0425, up 9.94% from last year’s. The company has boosted its dividend for the last 2 consecutive years with the latest dividend increase of $0.3359 reported on Wednesday January 27 2021. Measured over the last 3 years, the Dividend has been growing by 13.60% yearly.

It is projected that Novartis AG’s next ex-dividend date will be on 4-Mar. NVS is expected to distribute $2.804 as its next dividend.

Novartis AG’s quick ratio for the period ended June 29 was 0.60, with the current ratio over the same period at 0.80 meaning that NVS stock is not able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 0.49, while the total debt to equity was 0.66. In terms of profitability, the gross margin trailing 12 months is 70.70%. The trailing 12-month EBITDA margin is 35.52% while for the period ending June 29; Novartis AG’s operating margin was 21.20%. The firm’s gross profit as reported stood at $34.78 billion against revenue of $49.9 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Novartis AG’s cash and short-term investments amounted to $239.0 million against total debt of $35.85 billion. Net income and sales went up compared to those figures reported in the previous quarter. Analysts expected NVS to announce $1.53 per share in earnings in its latest quarter, but it posted $1.66, representing a 8.50% surprise. EBITDA for the quarter stood at more than $3.48 billion. NVS stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 69.89 billion, with total debt at $35.85 billion

Technical Picture

Let’s look briefly at Novartis AG (NVS) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 12 October was 35.90% to suggest the stock is trending Neutral, with historical volatility in this time period at 10.60%.

The stock’s 5-day moving average is $82.28, reflecting a +0.18% or $0.15 change from its current price. NVS is currently trading -3.87% above its 20-day SMA, -6.78% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by -11.15% and -7.42% respectively.

Stochastic %K and %D was 46.32% and 47.90% and the average true range (ATR) pointed at 0.87. The RSI (14) points at 33.25%, while the 14-day stochastic is at 32.72% with the period’s ATR at 0.92. The stock’s 9-day MACD Oscillator is pointing at 0.22 and -0.03 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Novartis AG (NYSE: NVS), Deutsche Bank downgraded it to a Sell rating. They previously had a Hold rating on the stock. Analysts offering their rating for NVS stock have a consensus rating for the stock as Overweight. Currently, 3 brokerage advisors rate NVS as a “sell,”, while 7 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 2 rates the stock as overweight while 12 have offered a “buy” rating.

What is NVS’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $75.17 and a high of $123.49, with their median price target at $98.00. Looking at these predictions, the average price target given by analysts is for Novartis AG (NVS) stock is $99.97.

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