Novartis Exceeds Expectations: Raises Outlook and Announces $15 Billion Share Buyback


Novartis, the Swiss pharmaceutical company, experienced a surge in its stock during early trading on Tuesday following an upward revision of its full-year outlook and the announcement of a $15 billion share buyback.

Strong Sales and Margins Drive Optimism

Thanks to robust sales in the second quarter and substantial margin expansion, Novartis has significantly raised its profit outlook. The company now anticipates core operating income to grow by a low-double-digit percentage, surpassing its previous projection for high-single-digit growth.

Share Buyback and Strategic Direction

Novartis plans to complete its share buyback program by the end of 2025. After successfully concluding its previous buyback initiative in June, the company highlights its strong balance sheet and anticipated future growth as the driving factors behind this decision. The share repurchase will amount to $15 billion and will enable Novartis to maintain the flexibility for further strategic bolt-on acquisitions.

Spin-Off of Sandoz Generic Medicines Unit

Additionally, Novartis’ board of directors has endorsed the spin-off of its generic medicines unit, Sandoz. This separation is scheduled to occur early in the fourth quarter, pending shareholder approval.

Impressive Q2 Results

In the second quarter, Novartis recorded sales of $13.6 billion, demonstrating an impressive 9% growth that surpasses analysts’ estimates of $13.5 billion (according to FactSet). Furthermore, core earnings per share reached $1.83, exceeding expectations of $1.73.

Market Response and Future Prospects

The positive developments have prompted a surge of more than 3% in Swiss-listed shares shortly after the market opened. Overall, Novartis’ stock has increased by approximately 4.5% since the beginning of 2023.

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