Novartis 2Q‘26 Results - Second Opinion

Research evidence excerpt

Novartis 2Q‘26 Results - Second Opinion

Global Research

22 July 2026ab

Novartis Equities

Switzerland2Q'26 Results - Second Opinion

Pharmaceuticals

12-month rating Neutral

UBS view: Headline 2Q26 results suggested a 3% sales and 12% core operating

income beat. However, approximately 1% of the topline growth was driven by sales

12m price target CHF116.00

phasing and approximately half of the operating income beat was driven by phasing of

sales and costs. So despite some positive sales momentum in the quarter there was

significant phasing and FY guidance (low SD growth on topline (at CER), and low SD Price (20 Jul 2026) CHF123.10

decline in core EBIT (at CER)) was reiterated. Attention now moves to key phase 3 RIC: NOVN.S BBG: NOVN SW

readouts in 2H26 - remibrutinib MS, del-desiran in DM1, pelacarsen in CV Lp(a) and

Rhapsido in HS. Given Novartis' premium valuation, we see risks modestly skewed to the Trading data and key metrics

downside and see better opportunities elsewhere in the sector. 52-wk range CHF130.50-92.15

Market cap. CHF235b/US$290b

Changes to forecasts Shares o/s 1,908m (REG)

We make minimal changes to our forecasts; <1% on FY26 sales/core EPS, and c. +1% Free float 82%

on sales/core EPS 2027-30. Avg. daily volume ('000) 2,755

Avg. daily value (m) CHF328.8

What we learnt from the call Common s/h equity (12/26E) US$47.0b

1) Management reiterated confidence that the REMODEL studies of BTK inhibitor P/BV (12/26E) 6.1x

remibrutinib in relapsing multiple sclerosis are performing as expected in terms of Net debt to EBITDA (12/26E) 1.5x

differences of active vs control arms. The company monitors blinded rates for safety and

EPS (UBS, diluted) (USD)

relapse rates but it has less insight about any potential impact on disability progression;

From To % ch Cons.