Novartis AG Fundamental Analysis (SIX: NOVN.SW)
Novartis AG (SIX: NOVN.SW) shows strong financial fundamentals with a PE ratio of 24.14, profit margin of 23.09%, and ROE of 29.64%. The company generates $54.7B in annual revenue with strong year-over-year growth of 10.45%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 70.5/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze NOVN.SW's fundamental strength across five key dimensions:
Efficiency Score
ExcellentNOVN.SW demonstrates superior asset utilization.
Valuation Score
ExcellentNOVN.SW trades at attractive valuation levels.
Growth Score
ExcellentNOVN.SW delivers strong and consistent growth momentum.
Financial Health Score
WeakNOVN.SW carries high financial risk with limited liquidity.
Profitability Score
ExcellentNOVN.SW achieves industry-leading margins.
Key Financial Metrics
Is NOVN.SW Expensive or Cheap?
P/E Ratio
NOVN.SW trades at 24.14 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, NOVN.SW's PEG of -4.30 indicates potential undervaluation.
Price to Book
The market values Novartis AG at 7.28 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 11.84 times EBITDA. This signals the market has high growth expectations.
How Well Does NOVN.SW Make Money?
Net Profit Margin
For every $100 in sales, Novartis AG keeps $23.09 as profit after all expenses.
Operating Margin
Core operations generate 29.86 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $29.64 in profit for every $100 of shareholder equity.
ROA
Novartis AG generates $10.34 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Novartis AG generates strong operating cash flow of $18.04B, reflecting robust business health.
Free Cash Flow
Novartis AG generates strong free cash flow of $15.94B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $8.38 in free cash annually.
FCF Yield
NOVN.SW converts 5.28% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
24.14
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-4.30
vs 25 benchmark
P/B Ratio
Price to book value ratio
7.28
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.52
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.18
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.86
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.30
vs 25 benchmark
ROA
Return on assets percentage
0.10
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How NOVN.SW Stacks Against Its Sector Peers
| Metric | NOVN.SW Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 24.14 | 30.97 | Better (Cheaper) |
| ROE | 29.64% | 515.00% | Weak |
| Net Margin | 23.09% | 30197.00% | Weak |
| Debt/Equity | 1.18 | 0.53 | Weak (High Leverage) |
| Current Ratio | 0.86 | 5.71 | Weak Liquidity |
| ROA | 10.34% | -16.00% (disorted) | Strong |
NOVN.SW outperforms its industry in 2 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Novartis AG's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
34.45%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
113.12%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
72.54%
Industry Style: Defensive, Growth, Innovation
High Growth