Novartis AG (NVS) is a pharmaceutical company that specializes in both patented pharmaceuticals and life-saving generics. The company’s drug portfolio targets a wide range of therapeutic areas, including immunology, hepatology, ophthalmology, neuroscience, cardiovascular, renal and respiratory conditions.
The company generated 80% of its revenue from Innovative Medicines (patent-protected prescription medicines) and 20% from Sandoz (generic pharmaceuticals) during the fourth quarter of 2020. These sales were distributed across Europe (39%), the United States (33%), Canada and Latin America (21%) and Asia, Africa and Australasia (7%).
Tough News Flow Ahead
Novartis reported lackluster fourth-quarter financial results earlier this year and at least one analyst is skeptical that they will improve near-term.
Revenue rose by 3% to $12.77 billion, missing consensus estimates by $100 million, with non-GAAP earnings of $1.34 per share missing consensus estimates by five cents. While the company delivered strong operational performance, analysts and investors remain concerned over its growth prospects and near-term news flow.
Cowen analyst Steve Scala recently downgraded the stock to Market Perform, saying that the past year has been challenging and he doesn’t see any significant improvement. In addition to new pressure on its largest drug, Cosentyx, the company has seen a delay on a regular decision for inclisiran and a disappointing launch for xiidra, among other things.
The company raised its annual dividend by 1.7% to $3.38 per share, which represents a 3.9% forward yield. The dividend is payable on March 15, 2021 to shareholders with an ex-dividend date of March 4, 2021.
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