Bernstein Maintains Buy Rating on Novartis AG with CHF108 Price Target

Bernstein analyst Florent Cespedes maintains a Buy rating for Novartis AG with a price target of CHF108.00. Cespedes has an average return of 0.2% and a 63.64% success rate on recommended stocks. The company has a Moderate Buy analyst consensus and a price target consensus of CHF101.00. NOVN market cap is CHF179.3B and has a P/E ratio of 15.76.

Swiss pharmaceutical giant Novartis AG is under increased scrutiny following US President Donald Trump's latest actions aimed at reducing drug prices and imposing tariffs. On August 1, 2025, Trump sent letters to 17 major pharmaceutical companies, including Novartis, demanding immediate price reductions. Novartis responded by stating that it is currently reviewing the letter [1].

The letters, which were published on Trump's Truth Social platform, give the companies a 60-day deadline to present concrete commitments to lower drug prices. Failure to comply could result in retaliatory measures from the US government. Among the companies targeted are Merck, Pfizer, AstraZeneca, Novo Nordisk, and Sanofi, along with Novartis and Roche [1].

Pharmaceutical stocks, including those of Novartis and Roche, have come under pressure. According to a study by the Rand Corporation, Americans pay on average 2.5 times as much for prescription drugs as Europeans. Trump's aim is to reduce this gap, and his latest moves are part of a broader effort to negotiate lower drug prices [1].

Bernstein analyst Florent Cespedes maintains a Buy rating for Novartis AG with a price target of CHF108.00. Cespedes has an average return of 0.2% and a 63.64% success rate on recommended stocks. The company has a Moderate Buy analyst consensus and a price target consensus of CHF101.00. NOVN market cap is CHF179.3B and has a P/E ratio of 15.76 [2].

The US tariffs, which include a 39% levy on Swiss exports, pose additional challenges for Novartis. The tariffs, part of Trump's escalating trade war, threaten Switzerland with enormous economic damage. The industry association Interpharma has called on the local industry to improve its framework to ensure investments in research and development [2].

Investment strategist Jurus Arthur from Oddo BHF estimates that Novartis could lose up to CHF800 million annually due to the tariffs, while Roche could lose up to CHF1 billion. These estimates underscore the financial impact that the US actions could have on the Swiss pharmaceutical sector [1].

Despite the challenges, Novartis and other affected companies are reviewing the letters and considering their responses. The situation remains fluid, and further developments are expected in the coming weeks as the companies work to meet the 60-day deadline.

References:
[1] https://www.swissinfo.ch/eng/drug-pricing/us-sets-deadline-for-novartis-and-other-pharma-firms-to-lower-prices/89770314
[2] https://uk.finance.yahoo.com/news/trump-unleashes-massive-tariffs-swiss-111107637.html