Taking the lead: Novartis AG (NVS)

Novartis AG (NYSE: NVS) stock fell -2.56% on Friday to $77.54 against a previous-day closing price of $79.58. With 2.34 million shares changed hands, the volume of the stock remained heavier than its average volume of 2.12 million shares. During the session, the Drug Manufacturers – General company that operates in wider Healthcare sector, reached to the highest price of $79.03 whereas the lowest price it dropped to was $77.50. The 52-week range on NVS shows that it touched its highest point at $94.26 and its lowest point at $79.09 during that stretch. It currently has a 1-year price target of $102.00. With its current market cap of 186.79 billion, NVS has annualized dividend of $3.33 while the current yield stands at 4.29%. Beta for the stock currently stands at 0.53.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of NVS was down-trending over the past week, with a drop of -4.17%, but this was down by -8.12% over a month. Three-month performance dropped to -4.87% while six-month performance fell -9.74%. The stock lost -6.63% in the past year, while it has lost -11.35% so far this year. A look at the trailing 12-month EPS for NVS yields 10.21 with Next year EPS estimates of 6.68. For the next quarter, that number is 1.56. This implies an EPS growth rate of 202.30% for this year and 9.47% for next year. EPS is expected to grow by 4.14% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 30.60%.

Float and Shares Shorts:

At present, 2.20 billion NVS shares are outstanding with a float of 2.18 billion shares on hand for trading. On Jul 14, 2022, short shares totaled 6.02 million, which was 0.28% higher than short shares on Jun 14, 2022. In addition to Dr. Vasant Narasimhan as the firm’s Chief Exec. Officer, Mr. Harry Kirsch serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 9.65% of NVS’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 4.90% of NVS, in contrast to 3.39% held by mutual funds. Shares owned by individuals account for –. As the largest shareholder in NVS with 0.94% of the stake, Dodge & Cox holds 22,552,769 shares worth 22,552,769. A second-largest stockholder of NVS, PRIMECAP Management Co., holds 17,604,080 shares, controlling over 0.73% of the firm’s shares. Loomis, Sayles & Co. LP is the third largest shareholder in NVS, holding 15,485,220 shares or 0.64% stake. With a 0.65% stake in NVS, the Dodge & Cox Stock Fund is the largest stakeholder. A total of 15,696,200 shares are owned by the mutual fund manager. The Vanguard PRIMECAP Fund, which owns about 0.44% of NVS stock, is the second-largest Mutual Fund holder. It holds 10,577,005 shares valued at 851.66 million. Loomis Sayles Growth Fund holds 0.18% of the stake in NVS, owning 4,245,330 shares worth 341.83 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for NVS since 26 analysts follow the stock currently. There are 7 analysts who recommend BUY ratings, while 4 suggest SELL ratings. Of the remaining analysts, 13 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With NVS analysts setting a high price target of $110.49 and a low target of $77.73, the average target price over the next 12 months is $93.31. Based on these targets, NVS could surge 42.49% to reach the target high and rise by 0.25% to reach the target low. Reaching the average price target will result in a growth of 20.34% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. NVS will report FY 2022 earnings on 01/25/2023. Analysts have provided yearly estimates in a range of $6.42 being high and $5.89 being low. For NVS, this leads to a yearly average estimate of $6.07. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Novartis AG surprised analysts by $0.05 when it reported $1.56 EPS against a consensus estimate of $1.51. The surprise factor in the prior quarter was $0.01. Based on analyst estimates, the high estimate for the next quarter is $1.62 and the low estimate is $1.47. The average estimate for the next quarter is thus $1.54.

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