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MarketScreener Homepage  >  Equities  >  Swiss Exchange  >  Novartis AG    NOVN   CH0012005267

NOVARTIS AG

(NOVN)
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Novartis upbeat as drugmakers see hospitals coping with COVID

10/27/2020 | 10:21am EST
FILE PHOTO: The logo of Swiss drugmaker Novartis is pictured at the French company's headquarters in Rueil-Malmaison

ZURICH (Reuters) - Novartis joined rivals Merck, Johnson & Johnson and Roche in predicting the worst of the pandemic may be over for drugmakers, amid signs healthcare systems have learned how to cope with surging infections without shutting down all services.

The Swiss company nudged up its 2020 profit guidance on Tuesday, now expecting operating income growth in a low-to-mid double-digit percentage range, compared with a low double-digit rate forecast previously.

Merck also raised its profit outlook on Tuesday, following Johnson & Johnson, while Roche last week stuck to sales forecasts and predicted a rebound from pandemic disruptions would continue.

While Novartis CEO Vas Narasimhan acknowledged COVID-19 could still derail 2020 goals, he said hospitals, doctors and patients had learned from painful lockdowns earlier this year that delayed treatment and hit drug sales.

"There's a strong desire not to repeat that," he said, adding U.S. healthcare systems appeared to be "a bit more resilient" in maintaining services than in Europe as the second COVID-19 wave intensifies.

Novartis's third-quarter core net income climbed 8% to $3.47 billion, above analysts' mean forecast of $3.32 billion.

However, sales rose just 1% to $12.3 billion, missing a $12.7 billion forecast. Novartis shares were down 3.5% at 1420 GMT, the biggest fall on the benchmark Swiss Market Index.

Other firms echoed Novartis's view, even as global COVID-19 cases rise by more than 400,000 a day and some countries see intensive care units at capacity within weeks.

"Our confidence is further reinforced by the ability of the health care systems around the world to adapt and deliver care," Merck Chief Financial Officer Robert Davis told investors, adding a pick up in elective surgeries had lifted demand.

A week ago, Roche CEO Severin Schwan called a second "healthcare lockdown" unlikely.

Still, countries including Germany, France, Spain, Switzerland, and the Czech Republic are either enacting or preparing new restrictions.

So Novartis remains on alert.

"Of course, if there would be a resurgence of COVID-19 impact on the health care systems and prescribing behavior in our major markets, there is a scenario of lower sales growth," finance chief Harry Kirsch told investors.

(Reporting by John Miller; editing by Brenna Hughes Neghaiwi and Mark Potter)

By John Miller


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
CREDIT SUISSE GROUP AG -0.89% 11.655 Delayed Quote.-10.26%
NOVARTIS AG 0.35% 81.26 Delayed Quote.-11.88%
ROCHE HOLDING AG 0.98% 303.1 Delayed Quote.-4.41%
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Financials (USD)
Sales 2020 49 435 M - -
Net income 2020 8 326 M - -
Net Debt 2020 19 268 M - -
P/E ratio 2020 24,4x
Yield 2020 3,52%
Capitalization 204 B 204 B -
EV / Sales 2020 4,51x
EV / Sales 2021 4,16x
Nbr of Employees 110 000
Free-Float 86,9%
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Technical analysis trends NOVARTIS AG
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 105,61 $
Last Close Price 89,63 $
Spread / Highest target 57,1%
Spread / Average Target 17,8%
Spread / Lowest Target -27,8%
EPS Revisions
Managers
NameTitle
Vasant Narasimhan Chief Executive Officer
Hans Jörg Reinhardt Independent Non-Executive Chairman
Harry Werner Kirsch Chief Financial Officer
John Tsai Chief Medical Officer
Elizabeth Theophille Chief Technology & Digital Officer
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