Novartis

While Q4 sales were  up 16% lflf to USD13.2bn, 3% better than our expectation, they slightly missed  (1.6%) the consensus expectations. However, core operating income grew 29% to USD4.7bn, a 12% beat against expectations.

2025 guidance: 
The management expects sales and COI to increase by mid-to-high single digit and high single-to-low double digit, respectively – which is better than AV and consensus expectations.

Overall, healthy momentum for key therapeutic areas, a strong pipeline and R&D execution, and a robust balance sheet remain the key factors supporting our positive recommendation on Novartis.

Expert opinion:
Another strong beat for Novartis, highlighting the resilience of the Swiss giant business model. Following the sharp drop in, share price in H2 24 and despite the recent bounce, the valuation is attractive with PE25 at 16.0x and PE26 at 14.8x, which in view of the strong underlying quality of the company is more than decent. I expect momentum to remain strong. The company isn’t present in the much sought after weight loss / anti obesity market but we believe the company could make acquisition in that space.