Is Novartis (SWX:NOVN) Still Undervalued After Its Recent Share Price Strength?

Novartis (SWX:NOVN) has been grinding higher, with shares up around 7 % over the past month and nearly 30 % over the past year, as investors lean into its steady earnings and pipeline story.

See our latest analysis for Novartis.

That move has been underpinned by solid execution rather than hype, with the roughly 30 % one year total shareholder return riding a clear uptrend in the share price as investors warm to its growth and defensiveness.

If Novartis has you rethinking your healthcare exposure, it is worth exploring other high quality healthcare stocks that could help round out a resilient, long term portfolio.

With earnings still growing and the stock now hovering around analyst targets, the real question is whether Novartis remains undervalued on its long term prospects or if the market has already priced in its next leg of growth.

Most Popular Narrative Narrative: 10% Undervalued

With Novartis last closing at CHF108.52 and the narrative fair value at roughly CHF108.62, the current share price is tracking that thesis almost exactly.

Operational efficiency gains from portfolio streamlining (e.g., previous spin offs and exiting non core lines) and productivity improvements are driving core margin expansion and higher free cash flow, which can be reinvested in R&D and shareholder returns, supporting long term earnings and net margin growth.

Read the complete narrative.

Curious how modest growth assumptions, rising margins and a richer future earnings multiple can still imply upside from here? The full narrative unpacks the math, step by step, and reveals the one valuation lever doing most of the heavy lifting.

Result: Fair Value of $108.62 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside depends on navigating looming drug patent expiries and mounting pricing pressure, which could compress margins faster than the optimistic narrative assumes.

Find out about the key risks to this Novartis narrative.

Build Your Own Novartis Narrative

If you want to stress test this view or build a thesis from the ground up, you can quickly create your own narrative in just a few minutes, Do it your way.

A great starting point for your Novartis research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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