4. Novartis AG (NYSE:NVS)
Number of Hedge Fund Holders: 22
Stock performance YTD through November 27: +9%
Novartis AG (NYSE:NVS) is a multinational Swiss pharmaceutical company specializing in generic drugs, over-the-counter drugs, vaccines, diagnostics, contact lenses, and animal health products. Novartis AG (NYSE:NVS) is one of the largest pharmaceutical companies in the world.
Novartis AG (NYSE:NVS) announced its Q3 results on October 26, posting earnings per share of $1.71, exceeding estimates by $0.05. Revenue for the period increased 6.29% from the prior-year quarter, reaching $13.03 billion, surpassing estimates by $14.29 million.
Novartis AG (NYSE:NVS) reported on December 22 that it has entered into a definitive agreement to acquire all of the outstanding share capital of the UK-based ocular gene therapy company, namely Gyroscope Therapeutics. Novartis AG (NYSE:NVS) will make an upfront payment of $800 million and possible additional milestone payments of up to $700 million over time. Until the transaction is cleared by regulators, Novartis AG (NYSE:NVS) and Gyroscope Therapeutics will operate as independent businesses. The acquisition will increase Novartis AG (NYSE:NVS)’s expertise in ophthalmology, which will enable the company to treat and prevent blindness worldwide.
Berenberg analyst Luisa Hector lowered the price target on Novartis AG (NYSE:NVS) on December 15 to CHF 85 from CHF 88 and kept a Buy rating on the shares.
In the third quarter of 2021, 22 hedge funds were bullish on Novartis AG (NYSE:NVS), holding stakes totaling $1.43 billion. Renaissance Technologies is one of the largest Novartis AG (NYSE:NVS) stakeholders, with 3.30 million shares worth $270.4 million.
Here is what Oakmark Global Fund has to say about Novartis AG (NYSE:NVS) in their Q4 2020 investor letter:
“Novartis is one of Europe’s largest pharmaceutical companies and possesses a highly diversified portfolio of innovative products. Its share price underperformed both the broader market and its pharma peers during 2020, largely due to a few disappointing late-stage trials and the company’s lack of Covid-19-related therapeutics or vaccines. These short-term issues provided us with an attractive entry point to invest in a leading pharmaceutical franchise with compelling economics. We estimate that the market is currently ascribing almost no value to Novartis’ pipeline despite the company’s excellent track record in new drug development. We expect that Novartis will deliver mid-single-digit, top-line growth and expand margins over the next five years as a result of its cost-savings plan. The company possesses one of the most diversified product portfolios in the pharma industry with 15 $1b+ compounds, which reduces its reliance on any single compound.”
