Novartis rises on beat-and-raise Q2, $15 billion buyback plan; analysts bulled-up

Novartis AG (SIX:) (NYSE:) reported stronger-than-expected Q2 results to send its Swiss-listed shares over 4% higher on Tuesday.

The company reported of $1.83 on revenue of $13.62 billion, ahead of the consensus that was looking for a profit of $1.71 per share on sales of $13.51 billion. Revenue jumped 9% year-over-year.

“Novartis delivers another strong quarter of sales growth and robust margin expansion, supporting an upgrade to Group guidance for 2023. The performance was broad-based across core therapeutic areas and key geographies. Our growth drivers and rich pipeline continue to provide confidence in our mid-term growth outlook, highlighted by upcoming milestones for Kisqali, Pluvicto and iptacopan,” Vas Narasimhan, CEO of Novartis, said:

The company now sees high-single-digit rate growth for full-year revenue, an upgrade compared to the prior mid-single-digit rate forecast. Novartis also said that its Board of Directors authorized a $15 billion share buyback plan.

Moreover, the Board endorsed the separation of Sandoz, by way of a 100% spin-off.

Stifel analysts reiterated a Buy rating on Novartis after the company topped quarterly consensus estimates for the second consecutive quarter.

BofA analysts are also bullish on Novartis as they commented:

“Our 24-27E EPS CAGR 14% remains >2x cons 6% and our 27E “New Novartis” opinc is c22% above cons driven by Kisqali, Pluvicto, Kesimpta, Iptacopan and Entresto (assumes generics Nov 27E vs cons 25/26E). Even in the event of a 25E generic Entresto launch we forecast 11% 24-27E EPS CAGR and 27E core opinc c15% ahead of cons. We think Kisqali could be a $12bn drug (un risk-adjusted) vs cons $5bn; Pluvicto $5.5bn vs cons $3.5bn; Kesimpta $5bn, vs cons $4bn.”