UPDATE: JP Morgan Downgrades Novartis to Neutral

JP Morgan lowers its price target on Novartis

to Neutral from Overweight as it believes the value of the company will be challenging to unlock without a break-up. JP Morgan says, "Novartis shares have underperformed both the sector and the market in 2011 and YTD. This can be partly attributed to uncertainty about the post-Diovan profitability and recent negative newsflow, though those factors do not explain the almost 40% discount of its SFr49 share price to Novartis' DCF-derived EmV of SFr78. The real culprit seems the corporate structure: Sum-of-the parts analysis shows that non-Pharma assets are worth more than Novartis' Pharma business, but their value remains buried within a group whose entire CF is valued at a Pharma multiple." NVS closed at $54.39 a share yesterday.