European Investor
27 Oct 2026, 15:56
Novartis Rises 0.9% as Priority Brands Drive Q3 Growth and Full-Year Profit Guidance Is Raised
Novartis shares rose about 0.9% after the company reported solid third-quarter sales growth, stronger core profitability and an improved full-year outlook.
Third-quarter net sales increased 4% at constant currencies, while core operating income rose 10%. Core operating margin expanded by 2 percentage points to 41.6%, supported by strong growth from key medicines including Kisqali, Kesimpta, Scemblix, Leqvio and Cosentyx.
Core EPS increased 8% at constant currencies to $2.46. Free cash flow was $5.1 billion, down 18% in U.S. dollar terms.
Reported earnings were weaker because of a partial impairment of the del-desiran asset. Operating income fell 61% at constant currencies, while net income declined 71%. Management said the del-desiran DM1 readout was disappointing, although other pipeline programs continue to progress.
Novartis raised its 2026 core operating income guidance to between flat and low-single-digit growth, compared with its previous expectation for a low-single-digit decline. Sales guidance remained unchanged at low-single-digit growth.
The 0.9% gain appears to reflect strong momentum in priority brands, margin expansion and the upgraded profit outlook, which outweighed the impairment-related decline in reported earnings.
Novartis shares rose about 0.9% after the company reported solid third-quarter sales growth, stronger core profitability and an improved full-year outlook.
Third-quarter net sales increased 4% at constant currencies, while core operating income rose 10%. Core operating margin expanded by 2 percentage points to 41.6%, supported by strong growth from key medicines including Kisqali, Kesimpta, Scemblix, Leqvio and Cosentyx.
Core EPS increased 8% at constant currencies to $2.46. Free cash flow was $5.1 billion, down 18% in U.S. dollar terms.
Reported earnings were weaker because of a partial impairment of the del-desiran asset. Operating income fell 61% at constant currencies, while net income declined 71%. Management said the del-desiran DM1 readout was disappointing, although other pipeline programs continue to progress.
Novartis raised its 2026 core operating income guidance to between flat and low-single-digit growth, compared with its previous expectation for a low-single-digit decline. Sales guidance remained unchanged at low-single-digit growth.
The 0.9% gain appears to reflect strong momentum in priority brands, margin expansion and the upgraded profit outlook, which outweighed the impairment-related decline in reported earnings.
