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Why Novartis (NVS) is a Top Value Stock for the Long-Term

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Achieving those goals is made easier with the Zacks Style Scores, a unique set of guidelines that rates stocks based on popular investing methodologies, namely value, growth, and momentum. The Style Scores can help you narrow down which stocks are better for your portfolio and which ones can beat the market over the long-term.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

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Novartis (NVS)

Switzerland-based Novartis has one of the strongest and broadest portfolios of varied drugs that has enabled it to maintain its dominant position as a top pharma company over the years. It continues to build depth in core therapeutic areas like cardiovascular, renal and metabolic, immunology, neuroscience and oncology in geographies like the United States, China, Germany and Japan. Novartis’ efforts to strengthen its wide portfolio by developing breakthrough treatments have made it even more formidable in this space. Cosentyx, Entresto, Kesimpta, Pluvicto, Scemblix, Zolgensma, Kisqali and Leqvio should fuel growth through 2030 and beyond.

NVS is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of B. Shares are currently trading at a forward P/E of 14.5X for the current fiscal year compared to the Large Cap Pharmaceuticals industry's P/E of 14.5X. Additionally, NVS has a PEG Ratio of 1.6 and a Price/Cash Flow ratio of 9.5X. Value investors should also note NVS' Price/Sales ratio of 4.4X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Five analysts revised their earnings estimate upwards in the last 60 days for fiscal 2024. The Zacks Consensus Estimate has increased $0.12 to $7.27 per share. NVS has an average earnings surprise of 2.2%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding NVS to their portfolios.

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