Novartis CEO Claims Agreement with U.S. to Avoid Tariffs Amid $23 Billion Investment
Written by Emily J. Thompson, Senior Investment Analyst
Source: CNBC
- Investment Shield: Novartis' $23 billion manufacturing investment, announced last year, is viewed as a moat against tariffs, with CEO Narasimhan stating that the company has an agreement with the U.S. government, expecting to be shielded from tariffs by mid-year.
- Tariff Threat: President Trump plans to impose a 10% tariff on several European countries, increasing to 25% by June 1, which could significantly impact the pharmaceutical sector, especially considering the EU's pharmaceutical exports to the U.S. totaled €84.4 billion.
- Inventory Assurance: Narasimhan noted that the company has sufficient inventory and can produce locally in the U.S. to meet domestic demand, thereby mitigating tariff risks and ensuring business continuity.
- Stock Performance: Novartis shares hit a record high of $116.06 last Wednesday, and despite being flat on the first trading day after the tariff announcement, the market's confidence in the company's future remains strong.
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Analyst Views on NVS
Wall Street analysts forecast NVS stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVS is 127.75 USD with a low forecast of 112.00 USD and a high forecast of 143.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
1 Buy
4 Hold
1 Sell
Hold
Current: 147.870
Low
112.00
Averages
127.75
High
143.00
Current: 147.870
Low
112.00
Averages
127.75
High
143.00
About NVS
Novartis AG is a Switzerland-based pharmaceutical company. The Company develops, manufactures, and markets branded and generic prescription drugs, active pharmaceutical ingredients (APIs), biosimilars and ophthalmic products. The Company uses science and digital technologies for treatments in the disease areas of immunology, dermatology, cancer, ophthalmology, neuroscience, respiratory, cardiovascular, renal and metabolism. The business activities of the Company are divided into two segments: Innovative Medicines, which includes innovative patent-protected prescription medicines for blood pressure, cancer and other ailments, and Sandoz, which includes generic pharmaceuticals and biosimilars.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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