Novartis AG - ADR

Strong Financial Performance: Novartis reported a notable Q4 sales growth of 16% and a full-year sales growth of 12%. Core operating income for Q4 grew by 29%, and for the full year, it increased by 22%. The core EPS for Q4 was $1.98, reflecting a 33% increase YOY, and the core margin reached 38.7%, positioning the company well for its target of over 40% by 2027.

Entresto & Generics Impact: Entresto demonstrated robust performance with full-year sales of $7.8 billion, reflecting a 31% increase. However, the company anticipates a loss of exclusivity (LOE) in mid-2025, which could impact profitability. Analysts are cautious about the potential gross margin pressure from generic entries and their influence on overall sales and income.

Pipeline Advancements: The company remains optimistic about pipeline growth, notably from its late-stage assets including Kisqali, Kesimpta, and the anticipated PSMAfore launch of Pluvicto. The ongoing expansion of these brands offers substantial potential revenue growth in the coming years. Novartis aims for 5%+ annual sales growth through 2029, bolstered by strong performance from priority brands.