Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . The company's strengths can be seen in multiple areas, such as its attractive valuation levels, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass
Highlights from the ratings report include:
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
- The gross profit margin for NOVARTIS AG is rather high; currently it is at 66.90%. Regardless of NVS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 17.73% trails the industry average.
- NOVARTIS AG reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, NOVARTIS AG reported lower earnings of $3.80 versus $4.26 in the prior year. This year, the market expects an improvement in earnings ($5.21 versus $3.80).
Novartis AG, through its subsidiaries, engages in the research, development, manufacture, and marketing of healthcare products worldwide. Novartis has a market cap of $153.7 billion and is part of the health care sector and drugs industry. The company has a P/E ratio of 16.8, below the S&P 500 P/E ratio of 17.7. Shares are up 11.9% year to date as of the close of trading on Tuesday.
You can view the full
or get investment ideas from our
--Written by a member of TheStreet Ratings Staff.
HOLIDAY SPECIAL: Let Jim Cramer show you every trade he is making in his $2.5 Million portfolio. Join now for 14-days FREE.Sign up today to get e-mail alerts before every trade