Will Novartis (NVS) Stock Be Helped Today By This Analyst Upgrade?

NEW YORK (TheStreet) -- Shares of Novartis AG (NVS) are up 0.93% to $87.81 in pre-market trade after Jefferies Group (JEF) upgraded the stock to "buy" from "hold."

"Updating for recent transactions and increased visibility on LCZ696 sees our EPS estimates raised by 3-10% leaving us 2-8% ahead of consensus in the mid to long term," Jefferies said.

"With a refocused business going forward and positive earnings momentum expected, we raise the stock to a Buy with a PT of CHF87" from CHF78.00, its note said..

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Separately, TheStreet Ratings team rates NOVARTIS AG as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate NOVARTIS AG (NVS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, reasonable valuation levels, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NVS's revenue growth has slightly outpaced the industry average of 1.4%. Since the same quarter one year prior, revenues slightly increased by 0.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
  • NOVARTIS AG has improved earnings per share by 22.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NOVARTIS AG reported lower earnings of $3.70 versus $3.80 in the prior year. This year, the market expects an improvement in earnings ($5.31 versus $3.70).
  • The net income growth from the same quarter one year ago has exceeded that of the Pharmaceuticals industry average, but is less than that of the S&P 500. The net income increased by 22.6% when compared to the same quarter one year prior, going from $2,398.00 million to $2,941.00 million.
  • You can view the full analysis from the report here: NVS Ratings Report
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