Buy Novartis Shares: Analysis and Target Price
Published: November 9, 2020 by Valentina
The coronavirus pandemic has highlighted the importance of pharmaceutical companies in the fight against epidemics. Recently, starting to buy Novartis shares has become one of the most attractive investments on the market, but does it mean that it is also a good investment?
In this guide, we will try to answer this question and provide the best indications for turning an investment into a future profit.
The indications start from the first necessary step to enter the world of investments: The choice of the broker.
We have collected a short list of the best online brokers, suitable for buying Novartis shares without paying commissions. With eToro, you can also make automatic investments.
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 50€
Min. Deposit: 250€
Min. Deposit: 100€
Min. Deposit: 250€
Novartis: The company and its origins
Founded in 1996 with the merger of Ciba-Geigy Ltd. and Sandoz AG, Novartis has become one of the largest pharmaceutical companies in the world. Based on the legacy of these two native companies, its journey has been truly remarkable.
Today Novartis International AG is present on almost every continent and is the fifth largest pharmaceutical company by total sales.
The history of CIBA began in 1859, when Alexander Clavel started a production of dyes for silk.
Sandoz AG was founded in 1886 by Dr. Alfred Kern and Edouard Sandoz as the Kern & Sandoz company.
In December 1996, Ciba-Geigy Ltd. and Sandoz AG merged to form Novartis International AG, creating one of the largest pharmaceutical conglomerates ever.
Novartis is a highly diversified company that researches, manufactures, and markets pharmaceuticals, herbicides, insecticides, veterinary medicines, and over-the-counter drugs.
How to buy Novartis shares
Buying Novartis shares becomes quite simple and cheap if done with online brokers without commissions.
With a PC, an internet connection, and one of these intermediaries, you can invest in complete safety from any device.
Not all brokers are the same,but we offer only intermediaries in possession of a regular license; the other should not even be taken into consideration.
Brokers offer contracts called CFDs (Contracts for Difference) which have the same price as the corresponding stock and allow you to invest up or down and earn (if the forecast is correct) in any market scenario.
Buy Novartis shares with the best brokers
Our selection of brokers starts from the evaluation of those characteristics that are necessary in the case of a safe and advantageous intermediary:
- Have a FCA, CySEC or equivalent license
- Offer the possibility to invest both upwards and downwards (short selling)
- Don’t charge commissions
- Request a minimum deposit not exceeding 250 euros.
The best brokers where to buy Novartis shares, which have all these features and many more, are eToro, ForexTB and Trade.com.
eToro: Semplicity and automatic trading
eToro doesn’t need an introduction given its fame. Indeed, it is the most popular online trading platform in the world.
Below, you can see an image with the CFD of the Novartis stock:
To buy Novartis shares, just click on the “Trade” button, decide how much to invest in the operation, and whether you want to buy or sell the stock.
The reliability of this broker is confirmed by the FCA license, which allows it to operate regularly in the UK.
The links to the charts and statistics are clearly visible in the image of the trading platform, which are essential for a correct technical analysis of the stock.
The number of eToro users has become so high thanks to its automatic investment system: Copy Trading.
This patent allows you to copy the market operations of the best traders in the world (in eToro) in a totally automatic and free way.
To use Copy Trading just follow these simple steps:
- Register on eToro
- In the section “people”, you can choose the traders to copy based on the performance.
- With a click, Copy Trading will copy exactly the same operations of the chosen traders in your account.
- At this point, you will get the same returns as these trading experts (of course, in proportion to your investment), without doing anything else.
Here are some of the best eToro Traders (which can be copied):
Both Copy Trading as well as traditional trading can also be tested on a free Demo account, without taking real risks.
For more details you can read our full eToro review.
ForexTB: Trading Course and Free Trading Signals
ForexTB is appreciated among online brokers, thanks to the quality of the services it offers free to its users.
For every type of investor, even the most demanding, this broker offers two free trading platforms:
- The web platform is easy to use and can be entered from any browser without downloading any software.
- Metatrader 4 is more technical and full of professional indicators and meets the needs of the more experienced traders.
Thanks to its safety and reliability, ForexTB has obtained a regular CySEC license.
The free services start from a very complete and exhaustive trading course on technical analysis. This is an ebook that can be downloaded for free from the official link below:
In addition to theory, this broker also wants to be practical; therefore, it offers for free the Trading Signals. These are very reliable operational indications that have a success rate of over 70%, thanks to the analysis of Trading Central.
Trade.com: Free training and minimum deposit
Trade.com is one of the fastest growing brokers. Indeed, its training area and minimum deposit are attracting many investors.
The trading platform of Trade.com is one of the fastest and most intuitive in the market and despite the apparent simplicity, it includes all the main technical indicators necessary for online trading.
Of course, we are talking about a broker in possession of the FCA license, therefore completely safe and regulated.
For novice traders, Trade.com offers a very clear and easy to understand trading course (ebook). This course provides the basics for technical analysis without too many incomprehensible technical terms. Moreover, it is free and you can download it from this link:
For more advanced traders, the training continues with the teaching area divided into three levels based on the trader’s preparation, so that anyone will find the most suitable material according to the personal experience.
The initial deposit can often be seen as an obstacle for the trading newbie to enter the financial market. For this reason, Trade.com allows you to open an account with only 100 euros.
To practice, however, a free and unlimited Demo account is available, which offers all the features of the real account but without the risk of losing money.
Novartis Shares: Real-time listing
Is buying Novartis shares worth it?
Novartis, listed on both the Swiss stock exchange and the NYSE, is part of the SMI index and is a very popular stock especially thanks to the coronavirus.
Novartis stock tumbled to $ 69.18 in the 52nd-week, after they reached around $ 100 per share in mid-February and went to $ 70 in the third week of March.
The company entered the coronavirus bear market from a strong performance in 2019, when full-year revenues were $ 47.4 billion, an increase of 9% with respect to 2018.
Net sales in the first quarter of 2020 increased by 13% year-on-year to $ 12.3 billion. The pandemic had a negligible impact on Novartis’ supply chain.
Therefore, buying Novartis shares is worthwhile, but you have to carefully evaluate the duration of the investment in order to maximize profits. In the next paragraphs, we will see better how to do it.
In addition to the performance of Novartis, we must also pay attention to what the main competitors are doing. Here is the list of the main ones:
- Johnson & Johnson
- Pharma Mar
Novartis technical analysis
Numerous technical analysts, famous traders, and institutional investors have recently valued Novartis shares. Let’s see a few:
- Morgan Stanley has reissued a “neutral” rating on Novartis shares
- Citigroup increased Novartis shares from a “neutral” rating to a “buy” rating
- Goldman Sachs Group has reissued a “buy” rating on Novartis shares
- The UBS Group has issued a “neutral” rating on Novartis shares
- Barclays has reissued a “buy” rating on Novartis shares
Ultimately, the major investment banks are either neutral or in favor of Novartis shares.
Novartis shares dividend
Novartis pays an annual dividend of $ 2.01 per share, with a dividend yield of 2.21%.
The company pays 38.36% of its earnings as a dividend.
Novartis shares and the coronavirus
In response to the pandemic, Novartis is taking part in numerous research initiatives, including the COVID-19 Therapeutics Accelerator, which is led by the Bill & Melinda Gates Foundation, Wellcome, and Mastercard.
Novartis also initiated three separate Phase 3 clinical trials of investigational drugs approved as potential treatments for the coronavirus.
- The company is collaborating with Incyte (NASDAQ: INCY) to study the efficacy of the drug ruxolitinib on the bone marrow when used with and without the standard of care for the treatment of patients with coronavirus-caused pneumonia.
- A second Phase 3 study focuses on the anti-inflammatory drug canakinumab, which is also being tested in COVID-19 patients who have developed pneumonia.
- Novartis’ third phase 3 clinical trial concerns hydroxychloroquine, which is administered to hospitalized coronavirus patients with and without azithromycin for the treatment of bacterial infections.
The company said in its Q1 report that it would donate up to 130 million doses of generic hydroxychloroquine worldwide.
Buy Novartis Shares: Forecasts
The US Food and Drug Administration (FDA) issued an Emergency Use Authorization (EUA) for hydroxychloroquine in March, but later revoked it, which could significantly reduce demand for the drug.
AveXis, a subsidiary of Novartis, is collaborating with Massachusetts Eye and Ear and Massachusetts General Hospital to produce a genetically-based coronavirus vaccine called AAVCOVID. The company will produce it for free.
The graph below clearly shows the performance of these shares in the stock market, which continue their recovery from the lows of March 2020.
The forecasts for Novartis shares are positive; the main analysts are positive regarding the long term, but it is the short term that could present strong fluctuations due to the aftermath of Covid-19.
To learn how to invest, it is useful to follow the advice of the main analysts who aim to buy Novartis shares: Keep them in the portfolio at least one year and maximize profits.
Novartis shares: Target Price
Analysts at Trading Desk eToro have issued positive ratings for Novartis.
Their twelve-month average target price is $ 107.00, which suggests the stock could grow 17.45% within a year.
Novartis was able to exploit the coronavirus crisis from a strong position and the performance of the stock reacted quickly.
Despite this, sharp fluctuations are still likely in the short term and therefore, to buy Novartis shares and make a good profit, it is preferable to make long-term investments.
If you do not feel ready to deposit money into a broker’s account, there is always the possibility of testing the Demo account offered for free by these intermediaries.
Here are the official links to access the Demo accounts of the best online brokers:
- Practice the eToro Demo account for free by clicking here
- Register for free on ForexTB and access the Demo account from this link
- Access the Trade.com Demo account for free from this link
Yes, but to know which strategies should be adopted, it is best to read our guide.
The technical analysis of the Novartis stock has some unknowns that we have analyzed in detail.
Online brokers without commissions are the best way to invest in Novartis. Among these eToro is the most convenient.
The 12-month target price for Novartis stock is $ 107.00 per share.