Novartis AG Prepares for 2024 Earnings Report Amidst Solid Growth Factors

Novartis AG (NVS), the Swiss pharmaceutical leader, is set to unveil its fourth-quarter 2024 and full-year financial results on January 31, 2025.

The company has consistently outperformed earnings estimates over the last four quarters, achieving an average surprise of 2.22%. In its most recent quarter, Novartis exceeded expectations by 6.19%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Novartis AG Price, Consensus and EPS Surprise

Novartis AG price-consensus-eps-surprise-chart | Novartis AG Quote

Let’s examine what could be expected before the earnings announcement.

NVS Focused on Core Revenue Drivers

Following the successful spinoff of its Sandoz business in October 2023, Novartis is focusing on a unified global strategy. The company’s efforts now center around four key therapeutic areas: cardiovascular-renal-metabolic, immunology, neuroscience, and oncology.

Sales in the fourth quarter are likely to have benefited from strong performances by Kisqali and Pluvicto. In fact, when reporting third-quarter results in October 2024, Novartis raised its sales and earnings forecasts for the year ahead.

Sales of the cardiovascular drug Entresto have shown impressive year-over-year growth, propelled by increased demand in the U.S. and Europe. This is largely due to the uptake of guideline-directed therapy in heart failure and enhanced penetration in hypertension in China. The growth trend is expected to continue into the fourth quarter.

The Zacks Consensus Estimate for Entresto’s fourth-quarter sales stands at $2 billion, while our model estimates $1.97 billion.

Cosentyx has also likely seen positive sales growth, driven by new launches like the hidradenitis suppurativa indication and the intravenous formulation within the United States.

Both the Zacks Consensus and our model estimates for Cosentyx’s fourth-quarter sales are set at $1.7 billion.

Increased demand is predicted to have similarly benefited multiple sclerosis drug Kesimpta, with sales estimates at $889 million according to the Zacks Consensus and $895.4 million per our model.

The positive trajectory for Kisqali, a breast cancer treatment, has likely continued in the fourth quarter, bolstered by FDA approval for expanded indications. The Zacks Consensus Estimate is $867 million for Kisqali’s sales, while our estimate is $874.2 million.

Strong demand in the U.S. and Europe has also contributed to substantial sales growth for Pluvicto, with estimates of $372 million and $402 million according to the Zacks Consensus and our model, respectively.

Sales for Leqvio, another important product, have likely surged as well, with estimates at $218 million from Zacks and $213 million from our model. Other drugs, including Jakavi and Tafinlar + Mekinist, may have also benefitted from increased demand.

On the downside, Tasigna has faced challenges due to growing generic competition, which has negatively impacted sales.

Recent Developments Worth Noting

Recently, the U.S. Court of Appeals confirmed the validity of the patent for Entresto (sacubitril/valsartan). As Novartis aims for organic growth, the company is also pursuing strategic acquisitions to strengthen its pipeline, including a collaboration with PTC Therapeutics for a candidate aimed at Huntington’s disease.

Moreover, Novartis completed the acquisition of Kate Therapeutics in November 2024, enhancing its gene therapy offerings. The European Commission has also approved Kisqali for adjuvant treatment alongside aromatase inhibitors for high-risk hormone receptor-positive breast cancer patients.

Novartis Share Price Performance Overview

In the past year, Novartis shares have declined by 5.2%, contrasting with a slight growth of 0.3% in the industry average.

Image Source: Zacks Investment Research

Predictions and Insights on NVS

Currently, our model does not indicate a strong prediction for an earnings beat for Novartis in the upcoming quarter. A positive Earnings ESP alongside a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) typically signals a higher likelihood of an earnings increase. However, this is not applicable in this case.

Earnings ESP for NVS currently sits at -0.89%, with the Zacks Consensus Estimate at $1.81 per share and our Most Accurate Estimate at $1.79.