As of May 25, 2025, Novartis AG has a Discounted Cash Flow (DCF) derived fair value of $130.60 per share. With the current market price at $92.76, this represents a potential upside of 40.8%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $119.55 |
| DCF Fair Value (10-year) | $130.60 |
| Potential Upside (5-year) | 28.9% |
| Potential Upside (10-year) | 40.8% |
| Discount Rate (WACC) | 4.9% - 7.0% |
Revenue is projected to grow from $51722 million in 12-2024 to $79820 million by 12-2034, representing a compound annual growth rate of approximately 4.4%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 51722 | 11% |
| 12-2025 | 55174 | 7% |
| 12-2026 | 56962 | 3% |
| 12-2027 | 58725 | 3% |
| 12-2028 | 60090 | 2% |
| 12-2029 | 61292 | 2% |
| 12-2030 | 65253 | 6% |
| 12-2031 | 67646 | 4% |
| 12-2032 | 70717 | 5% |
| 12-2033 | 75437 | 7% |
| 12-2034 | 79820 | 6% |
Net profit margin is expected to improve from 23% in 12-2024 to 23% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 11939 | 23% |
| 12-2025 | 12736 | 23% |
| 12-2026 | 13149 | 23% |
| 12-2027 | 13555 | 23% |
| 12-2028 | 13871 | 23% |
| 12-2029 | 14148 | 23% |
| 12-2030 | 15062 | 23% |
| 12-2031 | 15615 | 23% |
| 12-2032 | 16324 | 23% |
| 12-2033 | 17413 | 23% |
| 12-2034 | 18425 | 23% |
with a 5-year average of $2959 million. Projected CapEx is expected to maintain at approximately 6% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 3134 |
| 12-2026 | 3255 |
| 12-2027 | 3457 |
| 12-2028 | 3661 |
| 12-2029 | 3667 |
| 12-2030 | 3793 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 59 |
| Days Inventory | 192 |
| Days Payables | 149 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 13770 | 1361 | 2596 | 1421 | 8392 |
| 2026 | 18974 | 1873 | 3574 | (440) | 13967 |
| 2027 | 19663 | 1931 | 3684 | 377 | 13670 |
| 2028 | 20243 | 1976 | 3770 | 471 | 14026 |
| 2029 | 20581 | 2016 | 3845 | 39 | 14681 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 119.55 | 28.9% |
| 10-Year DCF (Growth) | 130.60 | 40.8% |
| 5-Year DCF (EBITDA) | 60.11 | -35.2% |
| 10-Year DCF (EBITDA) | 77.66 | -16.3% |
Is Novartis AG (NOVN.SW) a buy or a sell? Novartis AG is definitely a buy. Based on our DCF analysis, Novartis AG (NOVN.SW) appears to be significantly undervalued with upside potential of 40.8%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $92.76.