# Novartis AG (NOVN.SW)

Canonical: https://gigainvestors.com/s/NOVN.SW

Analysis as of: 2026-10-16T07:33:31.196Z. Financial observations: FY1998–FY2025.

Listing currency: CHF. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: CHF 125.90 per share; close as of 2026-10-15.

Estimated value: low CHF 86.06 per share, central CHF 97.52 per share, high CHF 112.79 per share. Buy at or below the central value CHF 97.52 per share. Valuation as of 2026-10-16T07:33:31.196Z; scenarios are not confidence intervals.

Expected annual return: 8.3% at the stated quote. About 8.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; CH 10-year bond 0.5% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.20×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.17×

- FY2017: 0.20×

- FY2018: 0.18×

- FY2019: 0.19×

- FY2020: 0.20×

- FY2021: 0.23×

- FY2022: 0.18×

- FY2023: 0.21×

- FY2024: 0.28×

- FY2025: 0.31×

### moat: pass

- ROIC, median of available years: 16.3%

- ROIC, second-lowest year: 11.9%

- Typical minus recent gross margin: -3.2 pp

- Typical gross margin (annual median): 71.8%

- Recent gross margin (lower of latest and 3-year median): 75.0%

- Years with nonpositive capital: 0

- Capital spending / revenue: 6.0%

- ROIC including acquisitions, ten-year median: 17.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 11.9%

- FY2017: 11.7%

- FY2018: 12.8%

- FY2019: 15.5%

- FY2020: 15.6%

- FY2021: 22.9%

- FY2022: 17.0%

- FY2023: 25.7%

- FY2024: 34.2%

- FY2025: 33.1%

### economics: pass

- Owner earnings / net income, 5-yr: 1.23×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $89B

- Net income, five-year total: $72B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -0.5 pp

- Working capital / revenue, change between three-year averages: -4.9 pp

- Working capital / revenue, final three-year average: 21.7%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.09×

- FY2022: 1.53×

- FY2023: 1.35×

- FY2024: 1.16×

- FY2025: 1.24×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 11.9% vs 33.1%

- Per-share earnings: 3.28 to 7.10 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -2.1%

- Ordinary dilution, 5-year annual growth: -3.0%

- Market cap gain: $79B

- Cumulative retained earnings: -$36B

- Diluted shares, 10-year annual growth: -2.1%

- Diluted shares, 5-year annual growth: -3.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 10.1%

- Per-share value change: $3.82

- Per-share value, starting three-year median: $3.28

- Per-share value, ending three-year median: $7.10

- Buybacks concentrated in cheaper years (correlation): -0.01

- Average buyback yield: 2.6%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $28B

- Cumulative net income, 10 years: $119B

- ROIC, first three-year median: 11.9%

- ROIC, last three-year median: 33.1%

Chart: Earnings per share; fiscal year observations.

- FY2016: $2.80

- FY2017: $3.28

- FY2018: $5.39

- FY2019: $5.12

- FY2020: $3.54

- FY2021: $10.66

- FY2022: $3.23

- FY2023: $7.10

- FY2024: $5.87

- FY2025: $7.49

### accounting: pass

- Sloan accruals: -4.7%

- Receivables to sales index (DSRI): 1.04×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 5.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.37×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.19×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.7%

- FY2017: -3.7%

- FY2018: -1.1%

- FY2019: -1.6%

- FY2020: -4.4%

- FY2021: 6.8%

- FY2022: -6.2%

- FY2023: 0.4%

- FY2024: -5.6%

- FY2025: -4.7%

## Holders

- [Sarah Ketterer](https://gigainvestors.com/CAU): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [David Hoeft](https://gigainvestors.com/DAC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Graham Kahn](https://gigainvestors.com/KB): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [William Browne](https://gigainvestors.com/TB): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 4.2% a year for ten years · "Novartis Forecasts Profitability Hit From Generic Drug Competition in U.S." (finance.yahoo.com, Feb 2026) · sales +10.4%

Story as of 2026-10-16T09:59:56.542Z; price observation 2026-10-15.

Price needs cash profits to grow 4.2% a year for ten years

- 2025-08-21: Leqvio® advances toward broader access with agreement between Novartis and the pan-Canadian Pharmaceutical Alliance ([finance.yahoo.com](https://finance.yahoo.com/news/leqvio-advances-toward-broader-access-120100054.html))

- 2025-11-21: NVS Ups Sales Projections as Key Drugs and Collaborations Fuel Growth ([finance.yahoo.com](https://finance.yahoo.com/news/nvs-ups-sales-projections-key-151500588.html))

- 2025-12-10: Novartis (SWX:NOVN) Valuation After Key Ianalumab Phase III Success and Expanded Itvisma FDA Approval ([finance.yahoo.com](https://finance.yahoo.com/news/novartis-swx-novn-valuation-key-121329055.html))

- 2026-02-04: Novartis Forecasts Profitability Hit From Generic Drug Competition in U.S. ([finance.yahoo.com](https://finance.yahoo.com/m/493fe5e0-f627-349b-b10a-8527e59039b9/novartis-forecasts.html))

- 2026-03-27: Novartis Agrees Up to $2B Excellergy Deal Amid Generic Pressure ([finance.yahoo.com](https://finance.yahoo.com/sectors/healthcare/articles/novartis-agrees-2b-excellergy-deal-161435815.html))

- 2026-04-28: Novartis Dips As Generics Take A Bite Out Of Its First-Quarter Sales ([finance.yahoo.com](https://finance.yahoo.com/m/3c833c41-8b56-3d39-bb0e-7e74cac39cac/novartis-dips-as-generics.html))

### Sales · FY2024–2025

sales +10.4%; source https://www.sec.gov/Archives/edgar/data/1114448/000111444826000004/nvs-20251231.htm; observed 2026-02-04.

- FY2016: $49B 

- FY2017: $43B 

- FY2018: $46B 

- FY2019: $49B 

- FY2020: $50B 

- FY2021: $44B 

- FY2022: $43B 

- FY2023: $47B 

- FY2024: $52B 

- FY2025: $57B 

### Gross margin · FY2025

gross margin 75%; source https://www.sec.gov/Archives/edgar/data/1114448/000111444826000004/nvs-20251231.htm; observed 2026-02-04.

- FY2016: 64.6% 

- FY2017: 68.6% 

- FY2018: 68.5% 

- FY2019: 70.4% 

- FY2020: 69.7% 

- FY2021: 73.3% 

- FY2022: 73.4% 

- FY2023: 73.3% 

- FY2024: 75.2% 

- FY2025: 75.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in drug manufacturers general; annual sales are USD 57.1 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1114448/000111444826000004/nvs-20251231.htm (filed 2026-02-04); FY2025: revenue 57126379000; grossProfit 42858402000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); NOVN.SW: Novartis AG researches, develops, manufactures, distributes, markets, and sells pharmaceutical medicines in Switzerland and internationally. The company offers Entresto, an angiotensin receptorneprilysin inhibitor to treat symptomatic chronic heart failure with reduced ejection fraction (HFrEF); Cosentyx to treat plaque psoriasis, pso riatic arthritis, ankylosing spondylitis, and nonradiographic axial spondy loarthritis; Kisqali, a selective oral cyclin dependent inhibitor of kinases 4 and 6 (CDK4/6); Promacta/Revolade to treat immune thrombocytopenia (ITP), thrombocytopenia, and patients with severe aplastic anemia (SAA); Tafinlar+Mekinist, an oral combination therapy to treat patients with certain types of cancers; and Jakavi for the treatment of myelofibrosis, polycythemia vera, and acute or chronic graftversushost disease (GvHD). It also provides Tasigna to treat philadelphia chromosomepositive chronic myeloid leukemia in the chronic and/or accelerated phase; Xolair for the treatment of allergic asthma and nasal polyps or severe chronic rhinosi nusitis with nasal polyps; Ilaris to treat fever syndromes, Still's disease, and acute gouty arthritis; Pluvicto to treat prostatespecific membrane anti genpositive metastatic castrationresistant prostate cancer; Sandostatin SC and Sandostatin LAR to treat acromegaly carcinoid tumors and other types of functional gastro intestinal and pancreatic neuroendocrine tumors; Zolgensma for the treatment of genetic root cause of spinal muscular atrophy; Lucentis; Leqvio to reduce LDL cholesterol; Lutathera; Scemblix; and Fabhalta. The company focuses on therapeutic areas, such as cardiovascular, renal and metabolic, immunology, neuroscience, oncology, and hematology. It has a license and collaboration agreement with Alnylam Pharmaceuticals, Inc. to develop, manufacture, and commercialize Leqvio (inclisiran), a therapy to reduce LDL cholesterol. Novartis AG has a strategic alliance with CAS for enhancing reaction data accessibility and supporting AI-enabled research. Novartis AG

### Why customers stay

Margins ranged from 73.3% to 75.2% during 2023–25; it earns 16.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); FY2023: grossProfit / revenue = 73.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); FY2024: grossProfit / revenue = 75.2%.

- Source: https://www.sec.gov/Archives/edgar/data/1114448/000111444826000004/nvs-20251231.htm (filed 2026-02-04); FY2025: grossProfit / revenue = 75%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); 10-year return on capital observations [[2016,0.11854620161671368],[2017,0.11684614974105918],[2018,0.12836795299610257],[2019,0.15499569700663657],[2020,0.15603312006334316],[2021,0.22917690420379558],[2022,0.1702589867541326],[2023,0.25702799248580827],[2024,0.3422390274118691],[2025,0.3306013757091067]]; median 0.1631460534087379. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 73% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1114448/000111444826000004/nvs-20251231.htm (filed 2026-02-04); Gross margin observations: [[2021,0.7331377632237231],[2022,0.7335082027564943],[2023,0.7327046720960138]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 9.7 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); FY2016: growth capex 0; upkeep 2879000000; owner earnings 9876000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); FY2017: growth capex 0; upkeep 2746000000; owner earnings 9693000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); FY2018: growth capex 0; upkeep 3355000000; owner earnings 14467000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); FY2019: growth capex 0; upkeep 2257000000; owner earnings 14911200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); FY2020: growth capex 0; upkeep 2585000000; owner earnings 11550000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); FY2021: growth capex 0; upkeep 2971000000; owner earnings 26267800000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); FY2022: growth capex 0; upkeep 2671000000; owner earnings 10631200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); FY2023: growth capex 0; upkeep 2753000000; owner earnings 20008400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); FY2024: growth capex 0; upkeep 3814000000; owner earnings 13835400000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1114448/000111444826000004/nvs-20251231.htm (filed 2026-02-04); FY2025: growth capex 0; upkeep 1621647000; owner earnings 18221986000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); Dividend observations: [[2016,6475000000],[2017,6495000000],[2018,6966000000],[2019,6645000000],[2020,6987000000],[2021,7366577997],[2022,7506000000],[2023,7255000000],[2024,7624000000],[2025,8189944000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1114448/000111444826000004/nvs-20251231.htm (filed 2026-02-04); FY2025: cash repurchases 9650264000 USD.

### Are managers owners

Insiders own 2.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); NOVN.SW SharesStats.PercentInsiders = 2.111 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 4.2% yearly over ten years; actual growth was 1.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-04); Ten-year compound average after fade. Initial solved rate 0.04687990617457782. Price 125.9; FX 0.8276775368316505; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 8.067411083540115 → FY2025 9.32070895140665. Closing-price date 2026-10-15.

## Monthly share-price history (CHF per share)

- 2016-10: CHF 58.98 per share

- 2016-11: CHF 58.86 per share

- 2016-12: CHF 62.08 per share

- 2017-01: CHF 60.70 per share

- 2017-02: CHF 65.69 per share

- 2017-03: CHF 62.29 per share

- 2017-04: CHF 64.14 per share

- 2017-05: CHF 66.44 per share

- 2017-06: CHF 66.86 per share

- 2017-07: CHF 69.04 per share

- 2017-08: CHF 67.78 per share

- 2017-09: CHF 69.46 per share

- 2017-10: CHF 68.87 per share

- 2017-11: CHF 70.55 per share

- 2017-12: CHF 69.04 per share

- 2018-01: CHF 70.55 per share

- 2018-02: CHF 66.32 per share

- 2018-03: CHF 64.73 per share

- 2018-04: CHF 64.26 per share

- 2018-05: CHF 61.13 per share

- 2018-06: CHF 63.07 per share

- 2018-07: CHF 69.74 per share

- 2018-08: CHF 67.35 per share

- 2018-09: CHF 70.71 per share

- 2018-10: CHF 73.93 per share

- 2018-11: CHF 76.21 per share

- 2018-12: CHF 70.41 per share

- 2019-01: CHF 72.47 per share

- 2019-02: CHF 76.28 per share

- 2019-03: CHF 80.30 per share

- 2019-04: CHF 78.87 per share

- 2019-05: CHF 81.60 per share

- 2019-06: CHF 84.54 per share

- 2019-07: CHF 86.69 per share

- 2019-08: CHF 84.36 per share

- 2019-09: CHF 82.02 per share

- 2019-10: CHF 81.60 per share

- 2019-11: CHF 87.25 per share

- 2019-12: CHF 87.10 per share

- 2020-01: CHF 86.41 per share

- 2020-02: CHF 77.01 per share

- 2020-03: CHF 75.68 per share

- 2020-04: CHF 77.97 per share

- 2020-05: CHF 78.70 per share

- 2020-06: CHF 78.12 per share

- 2020-07: CHF 71.53 per share

- 2020-08: CHF 73.97 per share

- 2020-09: CHF 75.74 per share

- 2020-10: CHF 67.76 per share

- 2020-11: CHF 77.97 per share

- 2020-12: CHF 79.28 per share

- 2021-01: CHF 76.33 per share

- 2021-02: CHF 74.11 per share

- 2021-03: CHF 76.55 per share

- 2021-04: CHF 73.89 per share

- 2021-05: CHF 74.80 per share

- 2021-06: CHF 79.92 per share

- 2021-07: CHF 79.50 per share

- 2021-08: CHF 80.36 per share

- 2021-09: CHF 72.82 per share

- 2021-10: CHF 71.69 per share

- 2021-11: CHF 69.61 per share

- 2021-12: CHF 76.09 per share

- 2022-01: CHF 75.95 per share

- 2022-02: CHF 76.15 per share

- 2022-03: CHF 77.01 per share

- 2022-04: CHF 81.99 per share

- 2022-05: CHF 82.33 per share

- 2022-06: CHF 76.63 per share

- 2022-07: CHF 77.44 per share

- 2022-08: CHF 75.00 per share

- 2022-09: CHF 71.59 per share

- 2022-10: CHF 76.68 per share

- 2022-11: CHF 79.28 per share

- 2022-12: CHF 79.23 per share

- 2023-01: CHF 78.15 per share

- 2023-02: CHF 75.14 per share

- 2023-03: CHF 79.39 per share

- 2023-04: CHF 86.37 per share

- 2023-05: CHF 82.61 per share

- 2023-06: CHF 85.30 per share

- 2023-07: CHF 86.32 per share

- 2023-08: CHF 84.65 per share

- 2023-09: CHF 88.97 per share

- 2023-10: CHF 84.54 per share

- 2023-11: CHF 85.12 per share

- 2023-12: CHF 84.87 per share

- 2024-01: CHF 89.40 per share

- 2024-02: CHF 89.49 per share

- 2024-03: CHF 87.37 per share

- 2024-04: CHF 89.05 per share

- 2024-05: CHF 93.17 per share

- 2024-06: CHF 96.17 per share

- 2024-07: CHF 98.58 per share

- 2024-08: CHF 102.12 per share

- 2024-09: CHF 97.15 per share

- 2024-10: CHF 93.80 per share

- 2024-11: CHF 93.27 per share

- 2024-12: CHF 88.70 per share

- 2025-01: CHF 95.58 per share

- 2025-02: CHF 97.66 per share

- 2025-03: CHF 97.84 per share

- 2025-04: CHF 93.79 per share

- 2025-05: CHF 94.03 per share

- 2025-06: CHF 96.17 per share

- 2025-07: CHF 94.19 per share

- 2025-08: CHF 101.16 per share

- 2025-09: CHF 100.12 per share

- 2025-10: CHF 99.27 per share

- 2025-11: CHF 104.48 per share

- 2025-12: CHF 109.60 per share

- 2026-01: CHF 114.62 per share

- 2026-02: CHF 130.50 per share

- 2026-03: CHF 120.86 per share

- 2026-04: CHF 115.90 per share

- 2026-05: CHF 117.82 per share

- 2026-06: CHF 126.58 per share

- 2026-07: CHF 126.60 per share

- 2026-08: CHF 123.26 per share

- 2026-09: CHF 119.96 per share

- 2026-10: CHF 119.30 per share

## Annual estimated value (CHF per share)

- FY2016: low CHF 39.74 per share, central CHF 44.89 per share, high CHF 51.76 per share

- FY2017: low CHF 38.14 per share, central CHF 42.98 per share, high CHF 49.42 per share

- FY2018: low CHF 45.10 per share, central CHF 50.59 per share, high CHF 57.89 per share

- FY2019: low CHF 62.56 per share, central CHF 70.68 per share, high CHF 81.48 per share

- FY2020: low CHF 49.52 per share, central CHF 55.84 per share, high CHF 64.24 per share

- FY2021: low CHF 64.09 per share, central CHF 71.55 per share, high CHF 81.48 per share

- FY2022: low CHF 62.85 per share, central CHF 70.58 per share, high CHF 80.86 per share

- FY2023: low CHF 66.97 per share, central CHF 75.49 per share, high CHF 86.83 per share

- FY2024: low CHF 66.52 per share, central CHF 75.00 per share, high CHF 86.29 per share

- FY2025: low CHF 88.74 per share, central CHF 100.37 per share, high CHF 115.84 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 20-F filing](https://www.sec.gov/Archives/edgar/data/1114448/000111444826000004/nvs-20251231.htm); period 2025-12-31, filed 2026-02-04.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.