Novartis stock gets outlook lift as core earnings advance

Novartis raised its full-year 2026 core operating income outlook after reporting third-quarter sales growth and a wider core margin on October 27. The pharmaceutical group kept its sales forecast unchanged, while a large impairment tied to the experimental medicine del-desiran sharply reduced reported earnings. The figures come from Novartis.

Core earnings support revised outlook

Net sales increased 4% to USD 14.522 billion in the three months through September, according to the company. Core operating income rose 11% to USD 6.036 billion, or 10% in constant currencies, and the core operating income margin reached 41.6%, an increase of 2.3 percentage points in reported currency.

Novartis now expects full-year core operating income to be broadly in line with 2025 or to grow by a low single-digit percentage at constant currencies. The previous forecast called for a low single-digit decline. The sales outlook remains low single-digit growth at constant currencies.

Chief Executive Vas Narasimhan said priority brands and new launches more than offset generic erosion. He also pointed to productivity measures and continued pipeline progress as support for the improved bottom-line outlook.

Impairment exposes pipeline risk

Reported operating income fell 59% to USD 1.843 billion, while net income dropped 70% to USD 1.196 billion. Novartis attributed much of the decline to higher research and development expenses, including a USD 1.9 billion partial impairment of the del-desiran in-process research and development asset, as well as higher other expenses and interest costs.

Del-desiran failed to meet its primary endpoint in the Phase III HARBOR study in myotonic dystrophy type 1. Novartis said secondary and exploratory analyses showed evidence of clinical activity and that it is evaluating the full results before deciding the next development path.

The underlying performance was stronger: core net income rose 8% to USD 4.655 billion and core earnings per share increased 9% to USD 2.46. Free cash flow, however, declined 18% to USD 5.111 billion in the quarter, showing that the earnings improvement did not translate into broader cash-flow growth.

Growth brands offset generic pressure

Several priority medicines supported the quarter. Kisqali sales rose 37% in constant currencies to USD 1.821 billion, Kesimpta increased 22% to USD 1.484 billion, Scemblix climbed 67% to USD 593 million and Leqvio advanced 63% to USD 506 million. Cosentyx sales grew 9% to USD 1.857 billion, while Entresto declined 38% to USD 1.165 billion amid generic competition.

Novartis also reported positive Phase III results for remibrutinib in relapsing multiple sclerosis. Other pipeline updates included regulatory progress for pelabresib and del-zota, alongside approvals or label expansions for Rhapsido, Pluvicto and Fabhalta.

The real-time quote of Novartis stock was EUR 144.90 at Lang & Schwarz on Friday, October 30, 2026, at 09:39:17 Berlin time.

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The next scheduled company milestone is Novartis's fourth-quarter and full-year 2026 results on February 3, 2027. The company will also hold its Meet Novartis Management event in London on November 18 and 19, 2026. More news and analyses on Novartis stock.