{"id":63011,"date":"2026-05-10T14:55:12","date_gmt":"2026-05-10T14:55:12","guid":{"rendered":"https:\/\/www.europesays.com\/ch\/63011\/"},"modified":"2026-05-10T14:55:12","modified_gmt":"2026-05-10T14:55:12","slug":"is-it-too-late-to-consider-novartis-swxnovn-after-its-strong-1-year-share-price-run","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ch\/63011\/","title":{"rendered":"Is It Too Late To Consider Novartis (SWX:NOVN) After Its Strong 1-Year Share Price Run?"},"content":{"rendered":"\n

Never miss an important update on your stock portfolio<\/a> and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE.<\/p>\n

Wondering if Novartis, at around its recent price of \u20ac113.36, still offers value, or if most of the easy gains are already behind it.<\/p>\n

The stock shows a mixed recent pattern, with a 2.2% decline over the last week and a 6.5% decline over the last month, while still sitting on a 4.5% gain year to date and a 28.5% return over the past year.<\/p>\n

These moves sit against a backdrop of ongoing attention on large pharmaceutical companies, including Novartis, as investors weigh long term pipelines, patent cycles and regulatory developments. Market sentiment around major health policy decisions and drug approvals can quickly shift risk perceptions and help explain why a stock can move even without company specific announcements.<\/p>\n

On Simply Wall St’s valuation checks, Novartis scores 4 out of 6 for being undervalued, as shown in its valuation score. The sections that follow will break down the main valuation methods used, then finish with a broader way to think about what this means for you.<\/p>\n

Find out why Novartis’s 28.5% return over the last year is lagging behind its peers.<\/a><\/p>\n

Approach 1: Novartis Discounted Cash Flow (DCF) Analysis <\/p>\n

A Discounted Cash Flow, or DCF, model estimates what a stock could be worth by projecting future cash flows and then discounting them back to today using a required return. It is essentially asking what future cash the company might generate, in today\u2019s dollars.<\/p>\n

For Novartis, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is about US$16.0b. Analysts provide detailed estimates for several years, and Simply Wall St then extrapolates those further out. In this case, projected Free Cash Flow reaches about US$23.1b in 2030, with a series of annual forecasts between 2026 and 2035 that are progressively discounted back to present value.<\/p>\n

Combining these discounted cash flows produces an estimated intrinsic value of about CHF 286.66 per share, based on the DCF output. Against the recent share price of about \u20ac113.36, this implies the stock is assessed as 60.5% undervalued on this model alone, which suggests a sizable valuation gap for long term investors to consider.<\/p>\n

Result: UNDERVALUED<\/p>\n

Our Discounted Cash Flow (DCF) analysis suggests Novartis is undervalued by 60.5%. Track this in your watchlist<\/a> or portfolio<\/a>, or discover 231 more high quality undervalued stocks<\/a>.<\/p>\n

\"NOVN<\/a> NOVN Discounted Cash Flow as at May 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

Approach 2: Novartis Price vs Earnings <\/p>\n

For profitable companies, the P\/E ratio is a useful shorthand for how much investors are paying for each unit of current earnings, which makes it a common reference point when you are comparing established stocks like Novartis.<\/p>\n

What counts as a \u201cnormal\u201d P\/E depends on how the market views a company\u2019s growth potential and risk, with higher growth or lower perceived risk often associated with higher multiples and the reverse also holding true.<\/p>\n

Novartis currently trades on a P\/E of about 20.5x, compared with the Pharmaceuticals industry average of roughly 22.3x and a peer group average of about 45.5x, so it sits below both of those reference points. Simply Wall St also calculates a proprietary \u201cFair Ratio\u201d for Novartis of 38.1x. This Fair Ratio indicates what P\/E might be reasonable after factoring in elements such as earnings growth, profit margins, industry, market cap and company specific risks.<\/p>\n

Because the Fair Ratio is tailored to Novartis rather than broad peer groups, it can give a more targeted view than simple industry or peer comparisons. On this basis, the current P\/E of 20.5x sits well below the 38.1x Fair Ratio. This suggests that the stock may be undervalued on this measure.<\/p>\n

Result: UNDERVALUED<\/p>\n

\"SWX:NOVN<\/a> SWX:NOVN P\/E Ratio as at May 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 99 top founder-led companies<\/a>.<\/p>\n

Upgrade Your Decision Making: Choose your Novartis Narrative <\/p>\n

Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced here as a simple way for you to attach a clear story to your numbers, linking what you believe about Novartis\u2019 pipeline, earnings and margins to a financial forecast and then to a fair value.<\/p>\n

On Simply Wall St\u2019s Community page, Narratives are available as an accessible tool used by millions of investors, allowing you to set your own assumptions for revenue, earnings and valuation multiples, then compare the resulting Fair Value to the current share price to help decide whether the stock looks attractive to you or not.<\/p>\n

Because Narratives update automatically when new information such as news, earnings or regulatory decisions is added to the platform, your story and fair value view stay current rather than being a one off calculation that quickly goes out of date.<\/p>\n

For Novartis, one investor might build a more optimistic Narrative that lines up with a higher fair value around CHF 138.41. Another might choose a more cautious Narrative closer to CHF 85.02. Seeing those side by side can help you decide which story and valuation better matches your own expectations.<\/p>\n

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

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

Fair value in this bullish Narrative: CHF 120.89<\/p>\n

Implied discount vs recent price: around 6.3% undervalued using this Narrative specific fair value.<\/p>\n

Revenue growth assumption: 4.22% a year.<\/p>\n

Analysts see steady revenue growth and slightly higher profit margins over the next few years, supported by priority brands and pipeline progress.<\/p>\n

Share count is expected to trend lower, which supports earnings per share alongside the dividend and buybacks.<\/p>\n

The consensus fair value sits only modestly above the current share price, so this Narrative views the stock as roughly fairly priced with measured upside.<\/p>\n

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

Fair value in this bearish Narrative: CHF 85.02<\/p>\n

Implied premium vs recent price: around 33.3% overvalued using this Narrative specific fair value.<\/p>\n

Revenue growth assumption: 0.30% a year.<\/p>\n

More cautious analysts assume flattish revenue and slightly lower profit margins as generic competition, pricing pressure and higher costs weigh on results.<\/p>\n

This Narrative uses a lower future P\/E multiple and assumes that current expectations may be too optimistic relative to earnings delivery.<\/p>\n

On this view, the fair value is well below the current share price, so the risk is that returns could disappoint if the higher growth case does not play out.<\/p>\n

Seeing these two Novartis Narratives side by side helps you decide which assumptions feel more realistic, and whether the current share price sits closer to your own sense of fair value or to the risk side of the equation. If you want to go further than these snapshots, you can build and track your own custom Narrative for Novartis on Simply Wall St using your preferred revenue, margin and multiple assumptions, then compare the outcome to these community views and to the current market price.<\/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":"Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors…\n","protected":false},"author":2,"featured_media":18088,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[127],"tags":[1103,1104,1105,206,842],"class_list":{"0":"post-63011","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-novartis","8":"tag-dcf","9":"tag-fair-value","10":"tag-free-cash-flow","11":"tag-novartis","12":"tag-share-price"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/116550862484819469","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/63011","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=63011"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/63011\/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=63011"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=63011"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=63011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}