Morgan Stanley Upgrades Novartis (NVS) to Equalweight

Morgan Stanley analyst Thibault Boutherin upgraded Novartis (NYSE: NVS) from Underweight to Equalweight with a price target of $100.00 (from $91.00).

The analyst comments: "We upgrade Novartis from Underweight to Equal-weight with a balanced risk-reward in the context of European large cap pharma. We now prefer Novartis over Roche (see our Roche downgrade report here), with a slightly better mid-term growth profile for Novartis (+4% sales/EBIT growth 2025-2028 vs. +3% for Roche), and more room for upside surprise from better commercial execution on key growth drivers and a better catalyst path. Whilst both companies have strong balance sheets and cash flow generation, we believe Novartis' bolt-on M&A strategy on mid-size assets supporting its four key therapeutic areas is more likely to overcome the LOE challenges at the turn of the decade, compared to Roche's pivot to cardiovascular/obesity and high risk/reward pipeline bets in neurology. We continue to prefer AstraZeneca in European large cap pharma, offering growth at a reasonable price and a more manageable LOE risk in the long term from pipeline optionality."

For an analyst ratings summary and ratings history on Novartis click here. For more ratings news on Novartis click here.

Shares of Novartis closed at $115.92 yesterday.

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