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If you are wondering whether Novartis at around CHF116 is still offering value or if most of the opportunity is already priced in, you are in the right place.
The stock has seen a 1% decline over the last 7 days and 30 days, yet it is still up 7.2% year to date and 30.2% over the past year, which can change how you think about both potential upside and risk.
Recent coverage around Novartis has kept attention on how this large pharmaceutical name fits into portfolios that want both defensiveness and exposure to healthcare growth themes. That context helps explain why the share price moves have been relatively contained in the short term, while the longer term returns remain stronger.
Right now, Novartis carries a valuation score of 5 out of 6. The next sections break down how different valuation methods view the stock, before finishing with a more complete way to think about its value that goes beyond any single model.
Find out why Novartis’s 30.2% return over the last year is lagging behind its peers.
A Discounted Cash Flow, or DCF, model takes projected future cash flows and discounts them back to today to estimate what the business could be worth right now.
For Novartis, the latest twelve month free cash flow is about US$16.12b. Analysts provide explicit forecasts for several years, and Simply Wall St then extends those estimates to build a 2 Stage Free Cash Flow to Equity model. Under this approach, projected free cash flow is modeled to reach US$22.91b in 2030, with intermediate years stepping up between these points based on the supplied analyst and extrapolated figures.
When all those future cash flows are discounted back, the model arrives at an estimated intrinsic value of about CHF287.85 per share. Compared with the current share price around CHF116, the DCF output implies a 59.6% discount. This indicates that the shares are priced well below this particular intrinsic value estimate.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Novartis is undervalued by 59.6%. Track this in your watchlist or portfolio, or discover 230 more high quality undervalued stocks.
NOVN Discounted Cash Flow as at Apr 2026
For a profitable company like Novartis, the P/E ratio is a useful way to link what you pay for each share to the earnings that support it. It gives a quick sense of how much investors are willing to pay for CHF1 of current earnings.
What counts as a “normal” or “fair” P/E depends on how fast earnings are expected to grow and how risky those earnings are. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher risk usually justifies a lower one.
Novartis currently trades on a P/E of 20.18x. That sits below the Pharmaceuticals industry average P/E of 22.23x and well below the peer average of 43.76x. Simply Wall St’s Fair Ratio for Novartis is 36.27x, which is its proprietary estimate of what the P/E might be given factors such as earnings growth, industry, profit margins, market cap and risk profile.
This Fair Ratio goes further than a simple comparison with peers or the broad industry, because it adjusts for the specific mix of growth, risks and profitability at Novartis rather than assuming all companies deserve the same multiple.
Comparing the Fair Ratio of 36.27x with the current P/E of 20.18x suggests the shares are trading below this modelled level.
Result: UNDERVALUED
SWX:NOVN P/E Ratio as at Apr 2026
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Earlier it was mentioned that there is an even better way to understand valuation, so Narratives bring that idea to life by letting you write a clear story for Novartis, link it to your own revenue, earnings and margin assumptions, and translate that into a Fair Value you can compare directly with the current share price.
On Simply Wall St’s Community page, Narratives are an easy tool that connect three things you care about: what you think is happening in the business, the financial forecast that follows from that view, and the Fair Value that falls out of those numbers. Narratives then keep that view current as fresh information such as earnings updates or clinical news is added to the platform.
For Novartis, one investor might lean toward a more cautious Narrative that lines up with a Fair Value closer to CHF85.02, while another might align with a more optimistic Narrative nearer CHF138.41. Each can use those Fair Values alongside the current market price to decide whether the stock looks attractively priced, fully valued or expensive based on their own assumptions.
For Novartis, however, we will make it really easy for you with previews of two leading Novartis Narratives:
🐂 Novartis Bull Case
Fair Value: CHF121.41
Gap to Fair Value vs current price of CHF116.28: 4.2% below this Narrative fair value
Revenue growth assumption: 4.21%
The bullish Narrative is based on steady revenue growth, margin expansion and continued pipeline progress in areas such as dermatology and immunology.
It incorporates ongoing share buybacks and dividends as key parts of total shareholder return, supported by free cash flow.
Analysts taking this view consider the current share price broadly in line with their fair value, provided the assumed revenue, earnings and P/E outcomes are met.
🐻 Novartis Bear Case
Fair Value: CHF85.02
Gap to Fair Value vs current price of CHF116.28: 36.8% above this Narrative fair value
Revenue growth assumption: 0.30%
The bearish Narrative assumes flatter revenue, some margin pressure and a lower future P/E multiple compared with today.
It highlights risks around generic erosion, pricing pressure and the cost of scaling advanced therapies if execution falls short.
Under these inputs, the fair value is well below the current price, so this view treats market expectations as demanding.
These two Narratives give you a structured way to test your own assumptions against clearly laid out revenue, margin and valuation paths, then decide where you sit on the Novartis spectrum.
Do you think there’s more to the story for Novartis? Head over to our Community to see what others are saying!
SWX:NOVN 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include NOVN.SW.
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