Novartis Reaffirms 2026 Sales Outlook, Raises Core Operating Income Guidance
Novartis reaffirmed 2026 sales growth guidance in the low single digits and revised its core operating income outlook to low single-digit growth, from a prior expectation of a low single-digit decline. The company reported a $1.9 billion impairment charge tied to Avidity Biosciences.
Novartis AG (NYSE: NVS ) reported mixed third-quarter earnings on Tuesday as the prized Avidity Biosciences deal worth $12 billion cost the company an estimated $1.9 billion in impairment charges, primarily driven by the timeline shifting due to additional clinical work to be completed. • Novartis stock is moving in positive territory. What’s pushing NVS stock higher? Novartis CEO Vas Narasimhan said, “While the del-desiran readout in DM1 was not what we had hoped, we saw evidence of clinical activity in the data and are working through the development path for this medicine.
“Importantly, our programs in FSHD and DMD continue to progress well. With continued momentum across the business and pipeline, we remain well on track to deliver our mid- and long-term outlook." Read Also: Top Investor Urges Novartis for Stronger Acquisition Oversight After M&A and Trial Setbacks Mixed Third Quarter Earnings Adjusted earnings came in at $2.46 per share, beating the analyst consensus estimate of $2.27. Revenue rose 4% year over year to $14.522 billion, slightly missing the expectations of $14.582 billion. Volume growth contributed 14 percentage points, largely offset by a nine-point impact from generic competition and a one-point drag from pricing.
Operating income fell 59% to $1.8 billion, including a $1.9 billion partial impairment charge of the del-desiran. “Novartis delivered solid sales growth in Q3, as priority brands and launches more than offset generic erosion, demonstrating the replacement power of the business. Combined with productivity efforts, this drove strong bottom-line performance and allowed us to upgrade our full-year guidance,” Narasimhan said. See More: Top Momentum Stocks Priority Brands Momentum The company said Priority Brands continues to perform well in the quarter.
Breast cancer drug Kisqali remained the largest growth driver, with sales rising 37% at constant currencies to $1.82 billion. Multiple sclerosis treatment Kesimpta increased 22% to $1.484 billion, while leukemia drug Scemblix surged 67% to $593 million. Radioligand therapy Pluvicto climbed 20% to $674 million, cholesterol drug Leqvio advanced 63% to $506 million and Cosentyx gained 9% to $1.857 billion. M&A Discipline, Upgraded Guidance During the earnings conference call, CEO Narasimhan said, “We are committed to investing in the core business.
We do primarily bolt-on M&A under $2 billion, very selectively doing larger deals when we see something that’s very compelling.” Novartis reaffirmed its 2026 sales growth guidance in low to single digits. The company revised its core operating income to grow in low single digits compared to prior expectations of a low single-digit decline. NVS Price Action: Novartis shares were up 0.95% at $155.25 at the time of publication on Tuesday, according to Pro data. Photo: Shutterstock Read Also: China’s AI Stock Rout Scary, but Crypto Punters Aren’t Calling a US Bubble Burst Yet