NVSEF - Novartis downgraded at Wolfe on valuation

Wolfe Research has lowered its rating on Novartis (NYSE:NVS) (OTCPK:NVSEF) to Peer Perform from Outperform, noting that the valuation of the Swiss pharma company has reached a level on par with those of its high growth peers. The analyst Tim Anderson argues that the recent uptick in Novartis (NVS) shares does not reflect its unique accomplishments. Instead, he attributes it to the defensive gains made by large pharma stocks. While the company’s EPS growth over 2-year/5-year/10-year periods stands below the peer group average of big pharma, Anderson observes that its P/E multiple is in line with those of other stocks with better EPS growth rates. In addition, the analyst points to the lack of near-term pivotal data reads and doubts about how the company can divest its Sandoz generic drug unit and address the subsequent earnings gap. However, Anderson reaffirmed the financial forecasts for Novartis (NVS) and maintained the price

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Novartis downgraded at Wolfe on valuation