{"id":34342,"date":"2026-03-18T10:11:39","date_gmt":"2026-03-18T10:11:39","guid":{"rendered":"https:\/\/www.europesays.com\/ch\/34342\/"},"modified":"2026-03-18T10:11:39","modified_gmt":"2026-03-18T10:11:39","slug":"is-it-too-late-to-consider-novartis-swxnovn-after-its-strong-multi-year-rally","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ch\/34342\/","title":{"rendered":"Is It Too Late To Consider Novartis (SWX:NOVN) After Its Strong Multi\u2011Year Rally"},"content":{"rendered":"\n

Find your next quality investment<\/a> with Simply Wall St’s easy and powerful screener, trusted by over 7 million individual investors worldwide.<\/p>\n

If you are wondering whether Novartis is priced attractively right now or if the recent run has already baked in the upside, this article walks through what the current share price might be implying.<\/p>\n

Novartis shares last closed at CHF 130.50, with returns of 3.2% over 7 days, 14.2% over 30 days, 20.3% year to date, 38.4% over 1 year, 94.4% over 3 years and 109.0% over 5 years. This naturally raises questions about what is already reflected in the price.<\/p>\n

Recent news around Novartis has kept investor attention focused on how the company is positioned within large cap pharmaceuticals and what that could mean for its long term prospects. This context is important when you are judging whether the current share price offers a margin of safety or leans toward optimism.<\/p>\n

Simply Wall St currently gives Novartis a valuation score of 5 out of 6. Next we will look at how different valuation approaches arrive at that view, before closing with a more holistic way to think about value beyond any single model.<\/p>\n

Novartis delivered 38.4% returns over the last year. See how this stacks up to the rest of the Pharmaceuticals industry.<\/a><\/p>\n

A Discounted Cash Flow model estimates what a company could be worth by projecting its future cash flows and then discounting those back to today, using a required rate of return. It is essentially asking what all those future dollars are worth in present terms.<\/p>\n

For Novartis, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections. The latest twelve month free cash flow is about US$16.1b. Analyst and extrapolated estimates suggest free cash flow reaching around US$24.5b in 2035, with interim projections such as US$16.1b in 2026 and US$22.2b in 2030. Simply Wall St extends analyst estimates beyond the usual 5 year window using its own assumptions.<\/p>\n

When all those projected cash flows are discounted back, the resulting intrinsic value from this DCF is US$269.09 per share. Against the latest share price of CHF 130.50, this implies a discount of 51.5%, which indicates that the shares screen as materially undervalued on this model alone.<\/p>\n

Result: UNDERVALUED<\/p>\n

Our Discounted Cash Flow (DCF) analysis suggests Novartis is undervalued by 51.5%. Track this in your watchlist<\/a> or portfolio<\/a>, or discover 218 more high quality undervalued stocks<\/a>.<\/p>\n

\"NOVN<\/a> NOVN Discounted Cash Flow as at Mar 2026 <\/p>\n

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Novartis.<\/a><\/p>\n

P\/E is usually the go to valuation yardstick for established, profitable companies because it ties what you pay directly to the earnings they are already generating. It is a quick way to see how much the market is willing to pay for each unit of profit.<\/p>\n

What counts as a \u201cnormal\u201d P\/E depends a lot on how fast earnings are expected to grow and how risky those earnings look. Higher growth and lower perceived risk tend to support a higher multiple, while slower growth or more uncertainty usually point to a lower one.<\/p>\n

Novartis trades on a P\/E of 23.16x, compared with the Pharmaceuticals industry average of 22.17x and a peer group average of 56.22x. Simply Wall St also calculates a Fair Ratio for Novartis of 39.25x, which is the P\/E it would expect given factors like earnings growth, margins, size and risk profile.<\/p>\n

This Fair Ratio is often more informative than a straight peer or industry comparison because it adjusts for company specific traits rather than assuming that one size fits all. With the actual P\/E of 23.16x sitting well below the Fair Ratio of 39.25x, Novartis screens as cheaper than what that framework would imply.<\/p>\n

Result: UNDERVALUED<\/p>\n

\"SWX:NOVN<\/a> SWX:NOVN P\/E Ratio as at Mar 2026 <\/p>\n

P\/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 97 top founder-led companies<\/a>.<\/p>\n

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. Narratives are simple stories you create about a company that sit behind the numbers you choose for fair value, future revenue, earnings and margins. They link Novartis\u2019 business story to a forecast and then to a fair value that you can compare with the current price to decide whether it looks attractive or stretched at any point in time.<\/p>\n

On Simply Wall St\u2019s Community page, Narratives are an easy tool used by millions of investors. You can quickly set out your view on Novartis. For example, one investor might lean toward a higher fair value such as CHF 138.41 based on expectations for stronger revenue growth and higher margins. Another might sit closer to a lower fair value like CHF 85.02 with flatter revenue and softer margins. As new news or earnings arrive, the Narrative updates automatically so your fair value stays aligned with the latest information.<\/p>\n

For Novartis, however, we’ll make it really easy for you with previews of two leading Novartis Narratives:<\/p>\n

\ud83d\udc02 Novartis Bull Case<\/p>\n

Fair value: CHF 138.41<\/p>\n

Price gap to this fair value: 5.7% below that level based on the last close of CHF 130.50<\/p>\n

Assumed revenue growth: 6.39% per year<\/p>\n

Backs a stronger role for high growth, patent protected brands such as Kisqali, Kesimpta, Pluvicto, Cosentyx, Scemblix and Leqvio across multiple geographies, with an eye on mix supporting higher earnings over time.<\/p>\n

Leans on radioligand, gene therapy and RNA platforms, plus late stage assets like remibrutinib and ianalumab, as future contributors that could help offset generic exposure and support margins.<\/p>\n

Accepts higher R&D and deal spending, including the Avidity transaction, but assumes these investments translate into products that justify earnings of about US$20.2b by 2029 and a future P\/E of 17.6x.<\/p>\n

\ud83d\udc3b Novartis Bear Case<\/p>\n

Fair value: CHF 116.24<\/p>\n

Price gap to this fair value: 12.3% above that level based on the last close of CHF 130.50<\/p>\n

Assumed revenue growth: 4.57% per year<\/p>\n

Focuses on more modest revenue growth assumptions, with earnings expected to reach about US$17.3b by 2028 and a lower future P\/E of 16.9x to justify the consensus price target.<\/p>\n

Highlights risks from loss of exclusivity, pricing pressure in key markets, biosimilar and generic competition and tougher reimbursement models that could weigh on margins and free cash flow.<\/p>\n

Sees the current share price as close to what analysts view as fair, with the consensus target of CHF 116.24 built on revenue of about US$59.1b and a 14.0x P\/E, so it asks you to pressure test whether those inputs feel realistic.<\/p>\n

If you want to go beyond the quick preview and see how other investors are joining the dots between the numbers and the story, you can step through the full bull and bear Narratives for Novartis, including the detailed assumptions behind each view, by using Curious how numbers become stories that shape markets? Explore Community Narratives<\/a>.<\/p>\n

Do you think there’s more to the story for Novartis? Head over to our Community to see what others are saying!<\/a><\/p>\n

\"SWX:NOVN<\/a> SWX:NOVN 1-Year Stock Price Chart <\/p>\n

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.<\/p>\n

Companies discussed in this article include NOVN.SW<\/a>.<\/p>\n

Have feedback on this article? Concerned about the content? Get in touch<\/a> with us directly. Alternatively, email editorial-team@simplywallst.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Find your next quality investment with Simply Wall St’s easy and powerful screener, trusted by over 7 million…\n","protected":false},"author":2,"featured_media":18088,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[127],"tags":[3632,962,1103,1104,1105,206,3378],"class_list":{"0":"post-34342","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-novartis","8":"tag-cash-flow","9":"tag-chf","10":"tag-dcf","11":"tag-fair-value","12":"tag-free-cash-flow","13":"tag-novartis","14":"tag-simply-wall-st"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/116249643294842245","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/34342","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=34342"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/34342\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/18088"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=34342"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=34342"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=34342"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}