NVS
Novartis Shs Sponsored American Deposit Receipt Repr 1 Sh
Healthcare, Event Driven/Special Sit
04/08/2019
Presented
| Date | 04/04/2019 |
| Price | $84.43 |
| Market Cap | $217.76B |
| Ent Value | $216.67B |
| P/E Ratio | 17.37x |
| Book Value | $30.00 |
| Div Yield | 3.01% |
| Shares O/S | 2,579.27M |
| Ave Daily Vol | 2,288,798 |
| Short Int | N/A |
Current
| Price | $116.22 |
| Market Cap | $227.38B |
| Novartis AG is a holding company, which engages in the development, manufacture, and marketing of healthcare products. It operates through the following four segments: Innovative Medicines, Alcon, Sandoz, and Corporate. The Innovative Medicines segment researches, develops, manufactures, distributes and sells patented pharmaceuticals, and is composed of two business units: Novartis Oncology and Novartis Pharmaceuticals. The Alcon segment researches, develops, manufactures, distributes and sells eye care devices and vision care. The Sandoz segment develops, manufactures and markets finished dosage form medicines as well as intermediary products including active pharmaceutical ingredients. The Corporate segment refers to group management and central services. The company was founded on February 29, 1996 and is headquartered in Basel, Switzerland. |
Please note, the presented data has been adjusted to account for the distribution of Alcon (ALC) shares on 04/09/2019. The stock split at a ratio of 1116/1000. The text of the note may refer to data based on the original presented price of $94.22.
Publicly traded companies mentioned herein: AstraZeneca PLC (AZN; AZN LN), Eli Lilly & Co (LLY), Novartis AG (NVS; NOVN SW), Pfizer Inc (PFE)
Highlights
With the planned spin-off of the Alcon eye care business set for Tuesday, April 9th, the presenter sees a favorable risk/reward setup for Novartis stock over the remainder of the year. He is long NOVN SW, with the FX hedged; however, the ADR is liquid and should work just as well. The way the spin is structured, stockholders will receive one (1) Alcon share - expected ticker ALC - for every five (5) Novartis shares/ADRs held as of the market close on April 8 (with a record date of April 1). The upside for NVS remainco shares seems to be underappreciated by the market (Alcon’s implied value per share is 9 - 10 CHF, he added). NVS’ EPS should grow ~10% YoY for the next 2 - 3 years, and applying a high teens multiple yields a 100+ target (for both the local shares and ADRs). Additionally, the remainco will carry the dividend, and the Street may be under-modeling sales for recently approved Mayzent.
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