Novartis AG (NVS) Hits Fresh High: Is There Still Room to Run?

Core Viewpoint - Novartis (NVS) has shown strong stock performance, with a 3.7% increase over the past month and a 24.4% gain since the beginning of the year, outperforming the Zacks Medical sector and the Zacks Large Cap Pharmaceuticals industry [1][2]. Financial Performance - Novartis has consistently exceeded earnings expectations, reporting an EPS of $2.28 against a consensus estimate of $2.12 in its last earnings report [2]. - For the current fiscal year, Novartis is projected to achieve earnings of $8.77 per share on revenues of $54.38 billion, reflecting a 12.29% increase in EPS and a 7.31% increase in revenues [3]. - The next fiscal year forecasts an EPS of $9.05 and revenues of $55.35 billion, indicating year-over-year changes of 3.26% and 1.79%, respectively [3]. Valuation Metrics - Novartis currently trades at 13.8 times the current fiscal year EPS estimates, slightly below the peer industry average of 13.9 times [7]. - The stock's trailing cash flow basis is at 11.3 times, matching the peer group's average [7]. - The PEG ratio stands at 1.74, which does not place the company among the top tier from a value perspective [7]. Zacks Rank and Style Scores - Novartis holds a Zacks Rank of 2 (Buy), supported by favorable earnings estimate revisions from analysts [8]. - The company has a Value Score of B, a Growth Score of B, and a Momentum Score of F, resulting in a combined VGM Score of B [6][8]. - Given the Zacks Rank and Style Scores, Novartis appears to have potential for further stock price appreciation in the near term [8].