Novartis AG Gains on Earnings Beat, New Buyback Plan

Shares of Swiss pharma giant Novartis AG (NVS:US) rose on Tuesday after the company reported better-than-expected results for its second quarter and announced a new $15 billion share buyback to be completed by year-end 2025.

Novartis posted a profit per share of $1.83 on revenue of $13.6 billion, topping the consensus that was looking for a profit of $1.70 per share on sales of $13.28 billion. Novartis also reported a core operating margin of 34.3%, ahead of the consensus by 100 basis points.

The company’s Q2 sales rose 9% year-over-year while core operating income grew 17%.

Vas Narasimhan MD, CEO of Novartis, said: “Novartis delivers another strong quarter of sales growth and robust margin expansion, supporting an upgrade to Group guidance for 2023. The performance was broad-based across core therapeutic areas and key geographies. Our growth drivers and rich pipeline continue to provide confidence in our mid-term growth outlook, highlighted by upcoming milestones for Kisqali, Pluvicto and iptacopan.”

Novartis raised its full-year guidance for sales as it now expects high-single-digit rate growth, above the prior mid-single-digit rate. Group core operating income is expected to grow low double-digit vs high single-digit previously.

Given the Q2 and H1 2023 outperformance, Novartis initiated a new $15 billion share buyback plan. Narasimhan added that the company will still maintain “the flexibility for continued strategic bolt-on acquisitions.”

The company also announced that its Board of Directors endorses the separation of Sandoz, by way of a 100% spin-off.

Novartis Swiss-listed shares rose more than 4% after the solid Q2 results. The U.S.-listed stock was up more than 7% year-to-date through Monday’s close.

Several Congress members, including Ro Khanna, Tom Carper, and Daniel Goldman invested in NVS stock earlier this year.