Novartis, the Swiss pharmaceutical major, is set to announce its financial results for the fourth quarter. Here is a summary of what you need to know.
Sales Forecast
According to Visible Alpha's consensus estimates, Novartis is expected to report quarterly sales of $11.51 billion. It's worth noting that the same period last year included the Sandoz generics business that was spun out in October.
Net Profit Forecast
Analysts predict Novartis's net profit for the quarter to be $3.75 billion, based on the Visible Alpha consensus. In the fourth quarter of 2022, the company achieved a net profit of $1.47 billion.
Share Performance
As of 1302 GMT on Tuesday, Novartis's shares were up 17% compared to the previous year. This outperformed the Stoxx Europe 600 Health Care index, which saw an 8.9% rise.
Key Factors to Watch
Guidance for 2024: JPMorgan analysts expect Novartis to provide guidance for mid-single-digit sales growth at constant exchange rates and high single-digit growth in core operating profit for 2024. The strong performance of oncology treatment Kisqali in metastatic breast cancer, heart-drug Entresto, prostate-cancer drug Pluvicto, and the launch of psoriasis-treatment Cosentyx for hidradenitis suppurativa are expected to drive the company's top line. Additionally, cost savings from a restructuring program should positively impact the bottom line. Novartis previously upgraded its mid-term guidance, projecting annual sales growth of 5% for the 2022-27 period and aiming for a core operating profit margin of about 40% by 2027.
Mergers and Acquisitions: Recent weeks have seen a renewed interest in mergers and acquisitions by big pharma companies. Morgan Stanley analysts suggest that Novartis may require external innovation to achieve its long-term growth goals. However, it was reported that Novartis abandoned its pursuit of Cytokinetics, a San Francisco-based company known for its promising heart drug, after previously being in advanced talks.
