Revenue Beat: Novartis AG Beat Analyst Estimates By 5.7%
It's been a good week for Novartis AG (VTX:NOVN) shareholders, because the company has just released its latest interim results, and the shares gained 3.6% to CHF128. Results overall were respectable, with statutory earnings of US$1.71 per share roughly in line with what the analysts had forecast. Revenues of US$28b came in 5.7% ahead of analyst predictions. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Novartis after the latest results.
Taking into account the latest results, Novartis' 21 analysts currently expect revenues in 2026 to be US$57.5b, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 7.7% to US$7.23. Before this earnings report, the analysts had been forecasting revenues of US$56.9b and earnings per share (EPS) of US$7.16 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
View our latest analysis for Novartis
There were no changes to revenue or earnings estimates or the price target of CHF126, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Novartis, with the most bullish analyst valuing it at CHF143 and the most bearish at CHF95.78 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Novartis' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Novartis' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 3.7% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Novartis.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Novartis' revenue is expected to perform worse than the wider industry. The consensus price target held steady at CHF126, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Novartis analysts - going out to 2028, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Novartis you should know about.
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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.