First Read: Novartis "2Q'26 Results - Initial Diagnosis" (Neutral) Weston

研报英文原文证据摘录

First Read: Novartis "2Q'26 Results - Initial Diagnosis" (Neutral) Weston

Forecast returns

Forecast price appreciation -5.8%

Forecast dividend yield 3.2%

Forecast stock return -2.6%

Market return assumption 5.2%

Forecast excess return -7.8%

Company Description

Novartis is a Swiss pharmaceuticals company. Following the spin-off of its eye care business,

Alcon, in April 2019, and Sandoz, its generics unit, in October 2023, it is a pure-play

innovative medicines business focused on oncology, neuroscience, immunology and

cardiovascular conditions.

Valuation Method and Risk Statement

All biopharma companies face risks around R&D pipeline success/failure, regulatory oversight

& approval decisions, PBM/country drug pricing negotiations, competitor product

developments, patent challenges and product liability. Novartis company-specific risks

include: On the upside: (1) faster revenue acceleration from new drug launches and pipeline;

(2) lower negative impact from patent expiries than forecast; (3) greater margin leverage from

mix shift to specialty care. On the downside: (1) worse commercial success for key in-market

and late-stage pipeline launch assets; (2) increased competition for Kisqali from new SERD

entrants in ER+ breast cancer, (3) significant patent expiries 2029-2032 include Cosentyx,

Kesimpta and Kisqali.

Valuation: We value Novartis based on a mutiple of 2026/27E underlying UBS EPS informed

by peer valuations, growth relative to peers and our PharmaValues NPV.

Amgen Inc:

Our valuation is based on 1yr forward P/E multiple, supported by a DCF framework. Amgen's

risks include (1) faster or deeper declines in sales for its legacy products and/or Enbrel, (2)

clinical risk associated key clinical studies for AMG-701, AMG-133, Tezspire, Lumakras (3)