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 solid stock price performance, growth in earnings per share, increase in net income, revenue growth and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- Powered by its strong earnings growth of 72.91% and other important driving factors, this stock has surged by 33.25% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NVS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- NOVARTIS AG reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, NOVARTIS AG increased its bottom line by earning $3.89 versus $3.80 in the prior year. This year, the market expects an improvement in earnings ($5.08 versus $3.89).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 74.0% when compared to the same quarter one year prior, rising from $1,175.00 million to $2,045.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 0.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
Novartis AG engages in the research, development, manufacture, and marketing of a range of healthcare products worldwide. Novartis has a market cap of $183.4 billion and is part of the health care sector and drugs industry. The company has a P/E ratio of 19.00, above the S&P 500 P/E ratio of 18.00. Shares are up 17.9% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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