Novartis slides as Q4 EPS, revenue miss estimates

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Novartis slides as Q4 EPS, revenue miss estimates
Credit: © Reuters.

Novartis (NVS) stock fell 4% in premarket trading Wednesday after the Swiss pharmaceutical company reported worse-than-expected core earnings for the fourth quarter.

Concretely, Novartis posted Q4 core earnings per share (EPS) of $1.53, missing the consensus projection of $1.66. Revenue came in at $11.42 billion, also below the estimated $11.66 billion.

Core net income for the quarter stood at $3.13 billion, while analysts were looking for $3.34 billion. Meanwhile, core operating profit hit $3.82 billion, compared to the $4.15 billion projected by analysts.

Novartis generated $1.30 billion from Cosentyx sales, topping the consensus estimates of $1.27 billion.

Looking ahead, the drugmaker expects net sales to grow at a mid-single-digit pace and core operating profit to hit high-single digits.

Net sales are anticipated to grow hit a compound annual growth rate (CAGR) of 5% between 2023 and 2028, while the core operating income margin is expected to rise to 40% by 2027.

Despite a poor quarterly performance, Jefferies analysts reiterated their Buy rating on NVS after the report’s release.

“Our EPS are up to 6% above mid-term cons and 2030+E, we see 20+% upside to cons on the widespread but misplaced assumption sales growth stalls/erodes from 2028,” analysts wrote.

“This upgrade cycle should be steadily realised over time, in our view, as new launches outperform such as Kisqali, Pluvicto & Fabhalta.”

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