Share count
1.9Bpeak FY2016
← All companies ← NVO Manual NVX → ← NVO Pharmaceuticals OCUL →
NVS, Novartis AG
Pharmaceuticals consumer brand
A pharmaceutical business, where patents grant a temporary monopoly the pipeline must keep refilling.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2025
$14.0B
Vital signs · TTM, with 5-yr average
The business in brief
What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- The pipeline against the patent cliff, and pricing. What decides it: whether new drugs replace those losing exclusivity, the odds in the clinical pipeline, and how durable pricing stays against payers and generics.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
The record, charted
FY2016–2025Each measure over its full record; the current point and the worst year marked.
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
$17.6Bowner earningsvs.$14.0Bnet incomelow FY2016
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
FY2016FY2025
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2025 the business turned $14.0B of profit into $17.6B of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Reported net income | $14.0B | $11.9B | $14.8B | $7.0B | $24.0B |
| Working capital & othertiming of cash in and out, other non-cash items | +$5.2B | +$5.7B | −$392M | +$7.3B | −$8.9B |
| Cash from operations | $19.1B | $17.6B | $14.5B | $14.2B | $15.1B |
| Capital expenditurecash put back in to keep running and to grow | −$1.5B | −$1.4B | −$1.1B | −$916M | −$1.1B |
| Owner earnings | $17.6B | $16.3B | $13.4B | $13.3B | $14.0B |
| Owner-earnings marginowner earnings ÷ revenue | — | — | — | — | — |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2025 20-F · source on SEC EDGAR →
Will it survive?
- Can it pay its interest? 15.4×ComfortableOperating income $17.6B ÷ interest expense $1.1B
What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- Debt under-captured — leverage unknown, not low
What this means
This company pays far more interest than its tagged debt implies (the rest sits under segment dimensions the data source strips), so its net cash or net debt cannot be read honestly: the gap is unknown, not zero, and 'net cash' here would be exactly the fiction the figure is meant to prevent. Judge it on the record and owner earnings instead.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Debt under-capturedIndustry peers: median 17%
What this means
This company's interest bill implies far more debt than its filings tag at the consolidated level (the rest sits under segment dimensions the data source strips), so invested capital, and the return on it, cannot be read honestly. Judge this one on Owner Earnings and the record instead.
- HighOwner earnings $17.6B = operating cash $19.1B − maintenance capex $1.5BIndustry peers: median 14%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 126% of revenue this year.
- Cash-backedCash from ops $19.1B ÷ net income $14.0B
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns most of itDividends + buybacks $17.0B ÷ Owner Earnings $17.6B
What this means
Of $17.6B Owner Earnings, $17.0B (97%) went back to shareholders, $7.8B dividends, $9.2B buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? —Not enough data
What this means
The filing data didn't include the inputs for this check.
Graham’s defensive tests · 4 of 5 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size PassRevenue ≥ $2B · $14.0B
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 1.12×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt —Debt ≤ working capital · —
What this means
The filings tag only a fraction of the debt this company's interest bill implies (much of it sits under segment dimensions the data source strips), so this test can't be run honestly.
- Earnings stability PassA profit every year (10-yr record) · no losses
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth PassEarnings +33% over the record · +51%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $7.12/share (latest year $7.33), the averaged base the calculator's gate runs on, and book value is $24.18/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Dec 31, 2025Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$30.5B
- Cash & short-term investments$11.6B
- Receivables$8.9B
- Inventory$6.3B
- Other current assets$3.7B
Current liabilities$27.3B
- Debt due within a year$682M
- Other current liabilities$26.6B
Current ratio1.12×all current assets ÷ what's due · Graham looked for 2×
Quick ratio0.89×stricter: inventory excluded
Cash ratio0.42×strictest: cash alone against what's due
Working capital$3.2Bthe cushion left after near-term bills
Debt due this year vs. cash$682M due · $11.6B cash
covered by cash on hand, no refinancing forced · both figures from the Dec 31, 2025 balance sheet
Deeper floors
Tangible book value($8.8B)equity stripped of goodwill & intangibles
Net current asset value($33.9B)Graham's net-net: current assets less all liabilities
Debt incl. operating leases$2.6B$1.9B of it operating leases
From the company's latest filing.
How the cash was used, 2016–2025
Over the record, the business generated $146.2B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.
- Reinvested$13.1B · 9%
- Dividends$71.1B · 49%
- Buybacks$57.0B · 39%
- Retained (debt / cash)$5.0B · 3%
- Returned to owners$128.1B
96% of the owner earnings the business produced over the span, $71.1B as dividends and $57.0B as buybacks.
- Average price paid for buybacks—
Buybacks ran $57.0B over the span, but the filings don't tag the share count needed to deduce the average price paid.
- Net change in share count−19.8%
The diluted count fell from 2378M to 1908M, so the buybacks outran the stock issued to staff.
- Dividend record$4.03/sh
Paid in 10 of the years on record, the per-share dividend growing about 4% a year. It was never cut over the span.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Acquisitions & goodwill
from the balance sheet & the 10-year cash-flow recordGoodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.
Goodwill & intangibles$55.0B50% of all assets; the premium carried on the balance sheet for businesses acquired
Against book equity55%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital
Cash spent acquiring$0over 10 years buying other businesses, against $13.1B of capital spent building
None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.
Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.
Peers, Pharmaceuticals
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| TEVATeva Pharmaceutical Industries Limited | $17.3B | 48% | -2.2% | -2% | 6% |
| REGNRegeneron Pharmaceuticals Inc. | $14.3B | — | 34.6% | 21% | 31% |
| VTRSViatris | $14.3B | 34% | 2.5% | 0% | 14% |
| NVSNovartis AG | $14.0B | — | 126.2% | — | 126% |
| VRTXVertex Pharmaceuticals Incorporated | $12.0B | 87% | 31.8% | 36% | 34% |
| BHCBausch Health Companies Inc. | $10.3B | 76% | 5.5% | 2% | 13% |
| ZTSZoetis Inc. | $9.5B | 69% | 34.2% | 26% | 22% |
| OGNOrganon | $6.2B | 62% | 25.0% | 17% | 12% |
| Group median | — | — | 28.4% | — | 18% |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the home-market price, not the US ADR quote. Novartis AG reports in USD, and every figure here (owner earnings, book value, the share count) is on that ordinary-share basis. Enter the price on the same basis: the local-exchange quote per ordinary share. A US ADR price in dollars bundles the ADR-to-ordinary ratio, so it will not reconcile with these figures and would throw the multiple off.
Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Novartis AG has delivered.
$
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth, delivered—
Owner-earnings growth, delivered—
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’23–’25)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Owner earnings $17.6B on 1908M shares outstanding, per the 20-F cover, as of 2025-12-31; net cash $10.9B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "Novartis AG (NVS), the owner's record," https://ownerscorecard.com/c/NVS, data as of 2026-07-09.
Manual order: ← NVO its page in the Manual NVX →
Industry order: ← NVO the Pharmaceuticals chapter OCUL →