RBC Kicks Off Novartis Coverage at Sector Perform as Pipeline Misses 'Dampened Momentum'

03:03 AM EDT, 09/09/2026 (MT Newswires) -- RBC Capital Markets began Novartis (NOVN.SW) coverage at sector perform, with a price target of 120 francs, saying the Swiss drugmaker's recent "unexpected" late-stage failures "dampened momentum." In a Tuesday note, the research firm added that the misses of the myotonic dystrophy type 1 candidate, del-desiran, and the cardiovascular drug pelacarsen cast doubt on Novartis achieving its sales compound annual growth rate target, as the company now needs "near-flawless" pipeline execution or to rely on business development. "Following pelacarsen and DM1, Novartis reiterated its +5-6% sales CAGR guidance. However, we see ~$13bn in [loss of exclusivity] drag by 2030 (Entresto -$6bn; Cosentyx, Promacta, Tasigna -$1bn each), which needs to be offset. The pipeline is now more critical to deliver, and NOVN needs immaculate success, in our view. We highlight the 40% core operating margin target as achievable by 2028-29, but not before, and model a "hockey stick" margin recovery vs. linear expansion consensus assumes," analysts wrote, adding they now forecast 4.8% sales CAGR. RBC views upcoming trial results for remibrutinib in multiple sclerosis at the MSToronto 2026 conference in October as "critical" for sentiment, though it sees the risk-reward profile tilting toward the downside. "Shares have pulled back from all-time highs, but we see no urgency to act. Despite a highly regarded management team, we need improved execution in filling the LOE hole before turning more constructive," the note said.