A look at Novartis
Novartis (NVS), a leading pharmaceutical company, reported EPS of $1.29 on revenues of $13.2 billion in Q2 2018, a 5% growth year-over-year compared to $12.2 billion in Q2 2017. Foreign exchange had a 2% favorable impact on revenues during the quarter.
The above chart compares revenues and EPS for Novartis since the first quarter of 2017.
Forward PE multiple
On a capital structure neutral basis, Novartis currently trades at a forward EV[1. enterprise value]-to-EBITDA multiple of ~13.6x, which is much higher than the industry average of ~11.8x as of August 28. Competitors Johnson & Johnson (JNJ), Eli Lilly (LLY), and GlaxoSmithKline (GSK) are trading at forward EV-to-EBITDA multiples of 12.1x, 14.4x, and 10.1x, respectively, compared to Novartis.
Forward EV-to-revenue multiple
Novartis currently trades at a forward EV-to-revenue multiple of ~4.3x, which is higher than the industry average of ~4.2x as of August 28. Johnson & Johnson (JNJ), Eli Lilly (LLY), and GlaxoSmithKline (GSK) are trading at forward EV-to-revenue multiples of 4.5x, 4.8x, and 3.2x, respectively, compared to Novartis.