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NOVARTIS AG ADR
Trailing:
RELATIVE
NYSE-NVS
55.47 RATIO 11.2
P/E RATIO 0.87 YLD
3.7% LINE
Target Price Range
TIMELINESS 2 Raised 4/29/11
2014 2015 2016
1 Raised 10/26/01
BETA .65 (1.00 = Market)
2014-16 PROJECTIONS
Ann’l Total
14%
10%
Insider Decisions
N D J F M A M J J
% TOT. RETURN 9/11
Institutional Decisions
VL ARITH.*
Hld’s(000) 219830 353801 245770
Novartis AG was created by the merger of 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
VALUE LINE PUB. LLC 14-16
1.60
1.55 Translation Rate ($/CHF)A
1.20
23.05
24.15 Sales per ADR
29.35
cember 23, 1996, issuing about 69 million 6.50
6.85 ‘‘Cash Flow’’ per ADR
7.55
4.95
5.20 Earnings per ADR B
5.55
2.04
2.30 Gross Divd’s Decl’d ADR C 2.72
available in the form of American Depositary .95
1.00 Cap’l Spending per ADR
1.20
28.80
30.45 Book Value per ADR
41.80
company conducted a 1-for-40 stock split for 2885.2 2885.3 2467.8 2428.9 2329.8 2348.3 2323.6 2265.5 2270.5 2300.8 2425
2400 Equiv ADRs Outst’g D
2270
each underlying share to bring it into parity Bold figures are
Avg Ann’l P/E Ratio
14.0
Value Line
Relative P/E Ratio
.95
estimates
Avg Ann’l Div’d Yield
3.5%
CAPITAL STRUCTURE as of 6/30/11
55905
58000 Sales ($mill)
66600
Total Debt $21908 mill. Due in 5 Yrs $7812 mill.
LT Debt $14096 mill.
LT Interest $127.6 mill.
31.5%
30.5% Operating Margin
28.0%
3760
3950 Depreciation ($mill)
4550
12005
12480 Net Profit ($mill)
12600
15.0%
15.0% Income Tax Rate
15.0%
Leases, Uncapitalized: Annual rentals $181 mill.
21.5%
21.5% Net Profit Margin
18.9%
14300
14400 Working Cap’l ($mill)
13500
Pension Assets-12/10 $3.5 bill Oblig. $1.45 bill.
13925
13900 Long-Term Debt ($mill)
17400
Common Stock 2,423,572,067 ADRs.
69800
73100 Shr. Equity ($mill)
94860
as of 8/8/11
16.0%
15.5% Return on Total Cap’l
11.0%
MARKET CAP: $134.0 billion (Large Cap)
17.0%
17.0% Return on Shr. Equity
13.5%
CURRENT POSITION
10.0%
9.5% Retained to Com Eq
6.5%
($MILL.)
41%
44% All Divd’s to Net Prof
49%
BUSINESS: Novartis AG is a major Swiss-based pharmaceutical
in development: Exforge. ’10 R&D, 16.4% of sales. Has about and health care company. Sales by business category for ’10: 82,400 employees in 140 countries. Acqd. Chiron, 4/20/06. Largest Pharmaceuticals, 65%; Generics (Sandoz), 18%; Consumer health, single investor: Dodge & Cox, 1.1% of common (’10 Form 20F).
12%; Vaccines and Diagnostics, 5%. Major therapeutic area: hyper- Chairman: Daniel Vasella, CEO: Jose Jimenez. Inc.: Switzerland.
tension. Major products include Diovan, Lotrel, Gleevec, Zometa, Addr.: Lichtstrasse 35, CH-4056 Basel, Switzerland. Tel.: 011-41- Neoral, Femara, Sandostatin, Lamisil, and Zelnorm. Major product 61-324-1111. U.S. tel.: 212-830-2440. Internet: www.novartis.com.
Novartis has a few promising drugs in oncology franchise that would be hard to
ANNUAL RATES
Past Est’d ’08-’10
its extensive portfolio. One of them is replicate, a large consumer product opera-
of change (per ADR) 10 Yrs.
to ’14-’16
multiple tion, spearheaded by Alcon (see below), sclerosis (m-s) treatment, that has just and Sandoz, the world’s third-largest gen- been approved in Japan. Gilenya, besides eric drug business. The only thing it lacks being easier for patients to administer (it’s is a significant biotech presence, a gap taken in pill form rather than via an injec- that NVS could easily fill given its ample QUARTERLY SALES ($ mill.)
tion), also has fewer side effects than com- financial wherewithal.
Mar.31 Jun. 30 Sep. 30 Dec. 31
peting m-s drugs because it isn’t an inter- Alcon adds to Novartis’ globally diver-
feron. Another promising medication is sified low-risk profile. Alcon, when com-
Ilaris, a gout therapy, also recently ap- bined with CIBA Vision, the proprietary 2010 11059 11921 12820 14464
proved in Japan, and a drug that appears eye-care unit, is by far the world’s biggest 2011 14027 15123 13500 13255
55905
to be gaining sales traction in Europe and eye-care operation. Alcon ($7.2 billion in 2012 14500 14250 14550 14700
58000
the U.S. Afinitor, a breast cancer drug, has 2010 sales) consists of three divisions: EARNINGS PER ADRB
annual potential sales of $2.6 billion. This Surgery, Mar.31 Jun. 30 Sep. 30 Dec. 31
figure is based on a penetration rate of Surgery looks to be the principle sales 30% of a $8.6 billion market (200,000 driver, patients paying $3,600 a month). Lastly, which will probably generate about $3.5 leukemia- billion in revenue in 2011.
1.19
1.24
4.95
replace This high-quality issue is best suited
1.40
1.25
1.25
1.30
5.20
Glivec. to the conservative income-oriented
GROSS ANNUAL DIVIDENDS PAIDC
Tasigna has been found to be particularly investor. The generous and growing divi-
Mar.31 Jun.30 Sep.30 Dec.31
efficacious when combined with another of dend is well covered thanks to rock-solid Novartis’ cancer-fighting treatments called finances.
growth of 6%-7% will likely land the stock Novartis has a very well-diversified in the $70-$85 range by the 2014-2016
business base. Besides the core Pharma- time frame.
ceutical segment (66% of sales), it has an Jeremy J. Butler (A) At fiscal yearend.
2007 (4Q). Next earnings report due late Octo- (D) In millions.
Company’s Financial Strength
(B) Based on U.S. GAAP and diluted ADR’s. ber.
Stock’s Price Stability
Each ADR represents one common share. In- (C) Annual dividend normally paid in the June
Price Growth Persistence
cludes restructuring charge of $0.19 a share in quarter.
Earnings Predictability
2011, Value Line Publishing LLC. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind.
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