Novartis raised to buy at Deutsche Bank

Published 05/02/2025, 12:34 am
© Reuters.

Investing.com -- Deutsche Bank upgraded Novartis (SIX:NOVN) to Buy on Tuesday following the Swiss pharmaceutical company’s strong fourth-quarter results and an improved 2025 outlook.

Analysts at Deutsche Bank (ETR:DBKGn) had previously held a cautious stance due to concerns over a potential post-2025 patent cliff but now see a more favorable long-term trajectory. 

“2025 ain’t the cliff and there’s still time to build a bridge,” the bank stated, emphasizing the company’s ability to sustain revenue growth beyond the near term.

Novartis’ Q4 results aligned with Deutsche Bank’s revenue expectations but surpassed projections on margins and the FY25 outlook. 

The firm expects sales to grow in the mid-to-high single digits at constant exchange rates (CER), with core EBITA rising in the high single to low double digits. 

“The robust outlook appears to set Novartis up for another year of nudging up street expectations,” analysts noted.

The firm also expressed optimism about Novartis’ pipeline, citing strong potential for late-stage assets, including ianalumab, pelacarsen, and remibrutinib. 

Analysts noted that pelacarsen’s expected launch has shifted to early 2026 but still see “grounds for confidence on decent revenue growth into 2026 and possibly beyond, depending on pipeline delivery.” 

The company’s Kisqali intellectual property risks have also diminished, reducing near-term uncertainties, said Deutsche Bank.

Deutsche Bank raised its price target for Novartis by 10% to CHF110, based on 14x estimated 2025 earnings. 

The firm considers this valuation justified by Novartis’ recent commercial outperformance and the likelihood of another year of double-digit EPS growth.

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