Equity Snap: Novartis (NOVN SW) Beat, despite headwinds: focus on pipeline

Research evidence excerpt

Equity Snap: Novartis (NOVN SW) Beat, despite headwinds: focus on pipeline

21 July 2026

Equity Snap: Novartis (NOVN SW) Equities Pharmaceuticals

Beat, despite headwinds: focus on pipeline Switzerland

◆ Beat on numbers driven by revenues beat and costs, despite Rajesh Kumar*

gross margin headwinds; guidance unchanged. Pipeline Senior Global Life Sciences & Healthcare Analyst HSBC Bank plc

catalysts a question for the call rajesh4kumar@hsbcib.com

+44 20 7991 1629

Morten Herholdt*

Novartis (NOVN SW, CHF123.10, Reduce, TP CHF95.00; NVS US, USD149.56, Global Life Sciences & Healthcare Analyst

HSBC Bank plc

Reduce, TP USD123.00) morten.herholdt@hsbc.com

(Priced as of 20 Jul 2026) + 44 20 7992 4082

Akshata Agarwal*

Outlook: FY’26 guidance (low single-digit net sales growth, and low single digit core Associate

operating income decline) unchanged arithmetically equating to 2H core operating Bangalore

income growth. Consensus expectations for 2H are mid-single-digit sales growth,

with core operating income recovering to mid-single-digit growth in 2H, on an * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/ qualified pursuant to FINRA regulations

underlying basis.

2Q’26 numbers divergence: 2Q net sales growth was +1% and core operating

income was flat on a constant currency basis (compared to expectations of a

decline). Revenues were +3% ahead of Bloomberg consensus, driven by beats on

Cosentyx (+5%), Kesimpta (+9%) offsetting miss on Entresto (-9%), Promacta

(-11%), and Xolair (-12%). Gross margin was 40-45bps below consensus, but core

operating income beat consensus by +11% driven by better performance on costs

SG&A (-6%, driven by productivity) and R&D (-4%).

Key debates include: around solid execution, capital discipline and potential for