NVSEF - Novartis: Another Beat Another Raise
2024-07-20 03:50:03 ET
Summary
- The company continues to deliver strong turnover growth and core margin expansion.
- Ongoing buyback combined with a juicy dividend yield provides downside protection. Positive contributions from newer drug launches.
- Novartis raised the 2024 core operating income guidance. Our buy rating is then confirmed.
Following the Sandoz spin-off, Novartis ( NVS ) (NVSEF) is now a pure player in innovative medicines, and we are not surprised to see a sharp margin increase. Here at the Lab, after a neutral rating recommendation held for years, we upgraded the company to a buy in April 2024. It was a good call, and Novartis' stock price is currently up by 14.96%, including the dividend payment (Fig 1). Our buy rating was backed by:
- Including Q2 2024, the company had raised its outlook for four quarters in a row.
- Despite a negative currency development, Novartis reported solid financial results and increased its dividend per share. In detail, European pharmaceutical giants Novartis and Roche ranked as the biggest dividend payers globally in the period, with payouts of $8.6 billion and $7.6 billion, respectively.
- Supportive bolt-on acquisition for MorphoSys AG.