Jefferies Upgrades Novartis to Buy Status, Emphasizing Diverse Therapeutic Portfolio and Global Presence

Jefferies has given Novartis AG a buy rating. Novartis is a leading pharmaceutical company with significant sales from oncology (29.9%), immunology (17.2%), and other therapeutic areas. The company operates 33 production sites globally and generates 39.5% of its net sales from the United States, making it a key player in the pharmaceutical industry.

Novartis AG, a leading global pharmaceutical company, has recently been given a buy rating by Jefferies, according to a research note published by Peter Welford [1]. The company, which operates 33 production sites around the world, reported strong sales growth and core margin expansion in the first quarter of 2024 [2].

Novartis' first-quarter sales grew by 11% compared to the same period last year, reaching $11.8 billion [2]. This growth was driven by a range of key brands and therapies, including Entresto, Cosentyx, Kesimpta, Kisqali, Pluvicto, and Leqvio, which all experienced significant sales growth [2]. Additionally, the company reported core operating income growth of 22% and net income growth of 37% [2].

The company's strong financial performance in the first quarter has led Jefferies to raise its target price for Novartis to CHF 110 [1]. This target price reflects the company's optimistic outlook for Novartis' future growth prospects.

Novartis' growth prospects are further supported by its robust pipeline of innovative therapies. For example, the company recently announced positive results from the Phase III ASC4FIRST study of Scemblix, a treatment for chronic myeloid leukemia in the first-line setting [2]. Additionally, the company is seeking regulatory approval for Fabhalta (iptacopan) for the treatment of immunoglobulin A nephropathy and primary nephrogenic hemolysis syndrome [2].

Despite facing challenges such as competition and regulatory hurdles, Novartis' strong financial performance and innovative pipeline position the company well for continued growth in the pharmaceutical industry. The company's net sales are expected to grow at a high-single to low double-digit rate in 2024, with core operating income expected to grow at a low double-digit to mid-teens rate [2].

References:

[1] MarketScreener. (2024, April 23). NOVARTIS AG Receives a Buy rating from Jefferies. https://www.marketscreener.com/quote/stock/NOVARTIS-AG-9364983/news/NOVARTIS-AG-Receives-a-Buy-rating-from-Jefferies-47285279/

[2] Novartis. (2024, April 23). Novartis delivers double-digit sales growth and core margin expansion in Q1 2024. Guidance raised for full-year 2024. https://www.novartis.com/news/media-releases/novartis-delivers-double-digit-sales-growth-and-core-margin-expansion-q1-fy-2024-guidance-raised