Why Is European Pharma Giant Novartis Stock Trading Lower Today?

Wednesday, Novartis AG NVS reported fourth-quarter 2023 net sales of $11.42 billion, up 8% (up 10% at constant currency, cc) driven by volume growth of 13 percentage points. The sales fell short of the consensus of $11.76 billion.

Generic competition had a negative impact of 3 percentage points, and pricing had no impact.

Sales growth was mainly driven by a continued strong performance from Entresto (+26% cc), Kisqali (+76% cc), Kesimpta (+73% cc), Cosentyx (+21% cc), and Pluvicto (+53% cc).

Also Read: Focus On Bristol Myers, Gilead Sciences, Johnson & Johnson, Novartis: FDA To Issue Classwide Black Box Warning on CAR-T Therapies For Blood Cancer Treatment.

Core operating income reached $3.8 billion (+5%, +13% cc), mainly driven by higher net sales, partly offset by higher SG&A and R&D investments.

Core net income was $3.1 billion (+6%, +11% cc), mainly due to higher core operating income.

The company reported core EPS of $1.53, up from $1.32 a year ago but below the consensus of $1.62.

Dividend: The Novartis Board of Directors proposes a dividend payment of CHF 3.30 per share for 2023, up 3.1% from CHF 3.20 per share in the prior year.

Guidance: For the fiscal year 2024, Novartis expects net sales to grow mid-single digits and core operating income is expected to grow high single-digit.

Novartis also extended its mid-term guidance, expecting sales to grow 5% per year until 2028. During its R&D day, Novartis updated investors on its research and development and said its mid-term sales guidance is upgraded to 5% CAGR (2022-27) versus 4% expected earlier.

The company confirms its core operating income margin will expand to ~40%+ by 2027.

Read Next: Novartis Retreats From Cytokinetics Deal, Dashing Hopes For Multi-Billion Dollar Acquisition.

Price Action: NVS shares are down 3.02% at $104.50 during the premarket session on the last check Wednesday.

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