UPDATE: Bank of America Downgrades Novartis to Underperform

Bank of America lowers its rating on Novartis

to Underperform from Neutral and lowers its price objective to $59.67 a share on risks and headwinds still persistent despite falling share market valuation. Bank of America says, "Despite the c5% fall in Novartis since FY11 results, we see it as likely to continue underperform is peers in 2012 given: 1) On our forecasts, growth remains slower than peers at 4% 13-16E EPS CAGR (vs majors 6%) yet its 2013E 10x PE remains a 5% premium; 2) Our lowered forecasts remain c3% below consensus for 2012 and 5% for 2013; 3) We see continued risks to consensus top line estimates for QVA149, Gilenya, Lucentis, Travatan Z from regulators/competitors; 4) Capital allocation policy remains vague versus clearer communication from peers; 5) We see limited 2012 catalysts to support re-rating." NVS closed at $55.66 a share on Friday.