Novartis Stock Surged as Company Announces a $15 Billion Stock Repurchase Program

Novartis Stock

Novartis, the Swiss pharmaceutical giant (NYSE:NVS), has revealed its plans to launch a stock buyback program worth up to $15 billion by the end of 2025. This announcement comes alongside the company’s revised sales guidance for 2023, signaling positive momentum for the organization. The details were disclosed during Novartis’ impressive Q2 financial results, where it surpassed market expectations on both revenue and profitability fronts.

Having recently completed a previous share buyback initiative announced in December 2021, which concluded in June, Novartis purchased a total of 170.7 million shares, demonstrating its commitment to delivering value to shareholders. Building on this success, Novartis (NYSE:NVS) has now raised its sales projections for 2023, anticipating high single-digit growth compared to the earlier forecast of mid-single-digit growth. Additionally, the company expects its group core operating income to expand by low double digits, up from the previously projected high single-digit increase.

The innovative medicines division played a pivotal role in driving Novartis’ robust financial performance during Q2. Core net income climbed by 11%, reaching approximately $3.8 billion, compared to the same period in 2022. This translated to non-GAAP earnings per share (EPS) of $1.83, surpassing market estimates of $2.56 per share.

Novartis’ revenue for Q2 stood at $13.62 billion, with two of its flagship drugs, Entresto (sacubitril/valsartan) and Cosentyx (secukinumab), contributing approximately $2.8 billion to this total. Entresto generated around $1.5 billion, marking a remarkable 35% year-over-year increase. Meanwhile, Cosentyx delivered approximately $1.3 billion, maintaining stable sales on a year-over-year basis.

Among Novartis’ product portfolio, the drug experiencing the highest percentage growth in sales year-over-year was Kesimpta (ofatumumab). Its revenue surged by an impressive 105%, reaching $489 million, illustrating the drug’s strong market reception and demand.

Novartis’ decision to initiate a substantial stock buyback program reflects its confidence in the company’s future growth prospects. The revised 2023 sales guidance, coupled with the impressive Q2 performance, highlights the company’s commitment to delivering value to its shareholders while capitalizing on the strong performance of its innovative medicines division.

With the ongoing pursuit of strategic initiatives and a solid financial foundation, Novartis is poised to maintain its position as a global leader in the pharmaceutical industry. The stock repurchase program serves as a testament to Novartis’ dedication to enhancing shareholder value and instilling investor confidence in its long-term prospects.

Featured Image: Freepik @ KamranAydinov

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