Novartis (NYSE:NVS) Posts Earnings Results, Misses Expectations By $0.12 EPS

Key Points

• Novartis missed Q1 expectations: reported EPS of $1.99 versus a ~$2.11 consensus and revenue of $13.52B (slightly below estimates), with revenue down 0.9% year‑over‑year and core operating income falling ~14% as core margin declined due to U.S. generic erosion and higher R&D.
• Priority brands and launches are driving growth: growth drivers rose 34% in constant currency—led by Kisqali, Pluvicto, Kesimpta, Leqvio and Semglee—with strong international launches (notably China) offsetting legacy product weakness.
• Guidance reaffirmed and pipeline/M&A add upside: management kept full‑year guidance (low single‑digit sales growth; low single‑digit decline in core operating income), expects H2 improvement as generic effects abate, and cited the Avidity acquisition plus multiple late‑stage readouts that could materially improve the mid‑to‑long‑term outlook.

Novartis (NYSE:NVS - Get Free Report) posted its earnings results on Tuesday. The company reported $1.99 earnings per share for the quarter, missing the consensus estimate of $2.11 by ($0.12), FiscalAI reports. The firm had revenue of $13.52 billion during the quarter, compared to analysts' expectations of $13.54 billion. Novartis had a net margin of 25.65% and a return on equity of 40.53%. The firm's revenue for the quarter was down .9% on a year-over-year basis. During the same period in the previous year, the firm posted $2.28 earnings per share.

Here are the key takeaways from Novartis' conference call:

• Growth drivers rose 34% in constant currency, led by Kisqali, Pluvicto, Kesimpta, Leqvio and Semglee with strong international launches (notably China), signaling clear launch momentum.
• Core operating income fell 14% and core margin declined ~4.1% in Q1, driven by U.S. generic (GX) erosion and higher R&D spend.
• Management reaffirmed full‑year guidance (low single‑digit sales growth; low single‑digit decline in core operating income) and expects H2 improvement as GX effects abate.
• Pipeline and M&A momentum: the Avidity acquisition closed and multiple late‑stage readouts (remibrutinib in MS/HS, del‑desiran DM1, pelacarsen, etc.) due in H2 could materially enhance the mid‑to‑long‑term outlook.

Novartis Price Performance

Novartis stock opened at $145.45 on Wednesday. The company has a market cap of $277.54 billion, a P/E ratio of 20.31, a price-to-earnings-growth ratio of 2.48 and a beta of 0.52. Novartis has a one year low of $104.93 and a one year high of $170.46. The business has a fifty day moving average of $155.06 and a two-hundred day moving average of $143.75. The company has a debt-to-equity ratio of 0.60, a quick ratio of 0.89 and a current ratio of 1.12.

Novartis Announces Dividend

The firm also recently disclosed an annual dividend, which was paid on Monday, March 16th. Shareholders of record on Wednesday, March 11th were given a $4.773 dividend. The ex-dividend date was Wednesday, March 11th. This represents a yield of 306.0%. Novartis's dividend payout ratio is presently 43.02%.

Institutional Investors Weigh In On Novartis

Several institutional investors have recently modified their holdings of NVS. CrossGen Wealth LLC acquired a new position in Novartis during the fourth quarter worth $28,000. Bank of Jackson Hole Trust increased its position in shares of Novartis by 425.0% in the fourth quarter. Bank of Jackson Hole Trust now owns 231 shares of the company's stock valued at $32,000 after buying an additional 187 shares in the last quarter. Measured Wealth Private Client Group LLC purchased a new position in shares of Novartis in the third quarter valued at $33,000. Pin Oak Investment Advisors Inc. raised its stake in shares of Novartis by 25.2% during the 3rd quarter. Pin Oak Investment Advisors Inc. now owns 462 shares of the company's stock worth $59,000 after buying an additional 93 shares during the last quarter. Finally, Litman Gregory Wealth Management LLC purchased a new stake in shares of Novartis in the 4th quarter worth about $65,000. Hedge funds and other institutional investors own 13.12% of the company's stock.

Novartis News Roundup

Here are the key news stories impacting Novartis this week:

• Positive Sentiment: Priority brands and launches showing robust growth (Kisqali, Pluvicto, Leqvio, Kesimpta, Scemblix) that are offsetting weakness from legacy products; management highlights continued momentum in these franchises. Read More.
• Positive Sentiment: European Commission approval of Rhapsido (remibrutinib) for chronic spontaneous urticaria — a first oral targeted CSU treatment — supports new launch upside in Europe. Read More.
• Positive Sentiment: Multiple pipeline and regulatory milestones (CHMP backing for remibrutinib, Ianalumab breakthrough/prioritized review, Fabhalta priority review, Avidity acquisition adds late‑stage programs) reduce longer‑term execution risk and add growth optionality. Read More.
• Neutral Sentiment: Company reaffirmed FY‑2026 guidance: net sales expected to grow low single‑digit while core operating income is expected to decline low single‑digit — guidance provides a clear roadmap but implies near‑term margin pressure. Read More.
• Neutral Sentiment: Solid cash generation (Q1 free cash flow reported) and a large, diversified portfolio give financial flexibility for R&D and M&A — supportive but not immediately price‑moving. Read More.
• Negative Sentiment: Q1 results missed estimates: reported EPS $1.99 vs. $2.13 expected and revenue slightly below consensus; core operating profit and core EPS declined year‑over‑year. Read More.
• Negative Sentiment: Severe U.S. generic erosion for Entresto (reports show a ~40%+ decline) and generic competition to Promacta are the main near‑term earnings drags and the key reason for the downward surprise. Read More.
• Negative Sentiment: Management flagged U.S. drug‑pricing policy risk (MFN proposals) as a potential headwind over the next 18 months — a regulatory risk that could pressure U.S. pricing and access. Read More.

Wall Street Analysts Forecast Growth

Several analysts recently commented on NVS shares. DZ Bank downgraded shares of Novartis from a "strong-buy" rating to a "hold" rating in a research report on Monday, February 9th. Weiss Ratings raised shares of Novartis from a "buy (b)" rating to a "buy (a-)" rating in a report on Friday, February 6th. TD Cowen reiterated a "hold" rating on shares of Novartis in a research note on Tuesday, February 17th. Sanford C. Bernstein upgraded Novartis to a "hold" rating in a research report on Thursday, March 19th. Finally, Wall Street Zen downgraded Novartis from a "buy" rating to a "hold" rating in a research note on Saturday, February 7th. One research analyst has rated the stock with a Strong Buy rating, six have assigned a Buy rating, seven have assigned a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Hold" and an average price target of $141.20.

Novartis Company Profile

Novartis is a Swiss multinational pharmaceutical company headquartered in Basel that researches, develops, manufactures and commercializes prescription medicines and related health-care products. Formed through the 1996 merger of Ciba-Geigy and Sandoz, Novartis operates globally and focuses on bringing therapeutics from discovery through clinical development to commercial markets worldwide.

The company's activities center on innovative pharmaceuticals across several therapeutic areas, including oncology, immunology, cardiovascular and metabolic diseases, neuroscience and ophthalmology, alongside capabilities in advanced therapies such as biologics, cell and gene therapies.