Novartis Stock Surges 3.39% on Strategic U.S. Deal, Q3 Revenue Rises 8.5%

The share price rose to its highest level so far this month today, with an intraday gain of 3.39%, closing at $141.71 on the New York Stock Exchange. The rally followed a strategic agreement with the U.S. government to reduce drug prices in exchange for delayed tariffs and a $23 billion commitment to expand domestic R&D and manufacturing. Barclays upgraded the stock to "equal weight" on January 6, signaling a shift in institutional sentiment, while J.P. Morgan raised its price target to $136.00, reflecting optimism about long-term growth.

Novartis reported stronger-than-expected Q3 2025 revenue of $14.36 billion, a 8.5% year-over-year increase, despite missing EPS estimates by $0.01. The firm’s partnership with the U.S. government includes launching medicines with comparable pricing globally and building direct-to-patient platforms for key therapies. Executives emphasized investments in San Diego, North Carolina, and Florida to enhance domestic production and innovation. Analysts highlighted the agreement’s potential to stabilize margins amid regulatory pressures, while mixed ratings persist, with a "Hold" consensus and divergent price targets ranging from $118.00 to $136.00.

The stock’s performance reflects broader confidence in Novartis’ ability to balance affordability commitments with growth. A $1.1 billion San Diego research hub and three new North Carolina manufacturing facilities underscore the firm’s focus on infrastructure. While short-term risks include execution delays and regulatory scrutiny, the company’s 19.36 P/E ratio and $299.35 billion market cap suggest undervaluation relative to peers. With a $141.45 12-month high already reached, investors will closely monitor the Moonshot Cancer Therapy program and Medicaid access initiatives as potential catalysts for further gains.