Morningstar Rating

Stock Research and Analysis

by Damien Conover, CFA

Bulls Say

Novartis' industry-leading late-stage pipeline should propel long-term growth. The company should launch several new chemical entities during the next few years in critical therapeutic areas such as respiratory and oncology.
Novartis operates across multiple segments, which provides greater stability in earnings compared with firms that are focused on only one business.
With a leading number of pipeline drugs designated as breakthrough therapies, Novartis' research and development in unmet medical needs should yield several new drugs with strong pricing power. Read more 

Bears Say

In 2013, the company's leading drug Diovan lost patent protection, creating a massive gap in sales as the drug represents close to 10% of Novartis' total sales.
Increased competition could materially slow the growth rates of two of Novartis' leading drugs, Lucentis and Gilenya.
The major acquisitions during the past couple of years continue to face integration risks as they are folded into Novartis. Read more 

Management

We give Novartis stewardship a Standard rating as the company has made several strong strategic acquisitions over the recent past, but most of the purchase prices bordered on the high end of the valuation range. The recent acquisition of dermatology   Read more 

Profile

Novartis develops and manufactures health care products in four main operating segments: branded pharmaceuticals, generic pharmaceuticals, eye care, and consumer products.  Read more 

An Undervalued Stock for Farsighted Investors  
Watch more 

Premium Membership

View all of our analyst reports with a free trial to Morningstar.com Premium.