NVS Should I Buy
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Based on the data provided, Novartis (NVS) does not present a strong buy opportunity for a beginner, long-term investor at this moment. While there are positive catalysts such as promising drug trials and R&D investments, the overbought technical indicators, mixed analyst ratings, and declining financial performance suggest caution. Holding the stock or waiting for a better entry point might be more prudent.
The stock is currently in a bullish trend with MACD positive and expanding, and moving averages aligned bullishly (SMA_5 > SMA_20 > SMA_200). However, the RSI is at 87.946, indicating the stock is overbought. The pre-market price is $161.46, nearing resistance levels at $163.895.
Novartis' Vanrafia showed significant kidney function improvement in a phase 3 trial for IgA nephropathy, which could lead to traditional approval and strong market performance.
The company is investing $23 billion in U.S. R&D, including a new biomedical research center in San Diego.
Financial performance in Q4 2025 showed a decline in net income (-14.51% YoY), EPS (-10.71% YoY), and gross margin (-1.48% YoY).
Analysts have mixed ratings, with some downgrades and reduced price targets, citing operational challenges and valuation concerns.
In Q4 2025, revenue increased by 2.23% YoY to $13.86 billion. However, net income dropped by 14.51% YoY to $2.41 billion, EPS declined by 10.71% YoY to $1.25, and gross margin fell by 1.48% to 74.44%. This indicates weakening profitability despite slight revenue growth.
Analyst sentiment is mixed. Recent downgrades include DZ Bank lowering its rating to Hold and Citi reducing its price target. However, there are also positive views, such as JPMorgan upgrading the stock to Overweight and Deutsche Bank raising the price target. The price targets range from CHF 120 to CHF 133, reflecting cautious optimism.
