Wall Street analysts’ estimates
Novartis (NVS) missed Wall Street analysts’ estimates for revenues but surpassed estimates for EPS (earnings per share) in 1Q17. It reported EPS of $1.13 against the estimated $1.12 in 1Q17 and reported revenues of $11.54 billion against the estimate of $11.65 billion.
The above graph shows analysts’ recommendations for Novartis stock. For 2Q17, analysts are estimating EPS of $1.18 on revenues of $12.3 billion.
Novartis stock has risen ~0.60% over the last 12 months and ~13.3% in 2017 year-to-date. Analyst estimates show the stock has a potential to return ~3.9% over the next 12 months. Analyst recommendations show a 12-month target price of $85.75 per share compared to the last price of $82.55 per share on July 13, 2017.
As of July 14, 2017, there are 32 analysts tracking Novartis. Of those, 14 analysts have recommended a “buy,” 15 have recommended a “hold,” and three have recommended a “sell.” Changes in analysts’ estimates and recommendations are based on changing trends in the price of the stock and the performance of the company. The consensus rating for Novartis is 2.5, which represents a “moderate buy” for value investors.
To divest the company-specific risks, you can consider ETFs such as the iShares Global Healthcare ETF (IXJ), which holds 4.9% of its total assets in Novartis. IXJ also holds 8.0% of its total assets in Johnson & Johnson (JNJ), 3.9% in Merck & Co. (MRK), and 4.5% in Pfizer (PFE).