Novartis Q1 2026 Earnings Summary
On April 28, 2026, Novartis AG (NOVN.CH) reported disappointing first-quarter earnings, leading to a significant decline in its stock price. The company's net sales for the quarter totaled $13.11 billion, which represents a 1% decrease year-over-year and fell short of analysts' expectations of $13.40 billion. Additionally, the core operating profit dropped by 12% to $4.9 billion, while the market had anticipated around $5.1 billion.
Key Factors Behind the Disappointing Results
The primary reason for Novartis's poor performance was the loss of patent exclusivity for three of its flagship drugs:
- Entresto: Sales plummeted by 42% to $1.31 billion.
- Promacta: Experienced a 66% decline in sales.
- Tasigna: Saw a 59% drop in sales.
The total revenue gap due to the expansion of generic alternatives is estimated to be around $4 billion for the entire year of 2026.
Management's Outlook
Despite the challenging start to the year, Novartis's management is maintaining its full-year forecasts, projecting low single-digit growth in net sales and a low single-digit decline in core operating income. CFO Mukul Mehta stated that the Q1 results were in line with the company's internal expectations, and they anticipate a return to growth in the latter half of the year. The company is optimistic about the sales acceleration of new priority drugs such as Kisqali, Pluvicto, Kesimpta, Scemblix, and Leqvio, which are expected to partially offset the losses from generics.
Furthermore, Novartis indicated that it might revise its medium- and long-term growth forecasts upward once data from several key clinical trials becomes available in the second half of 2026. The company had previously updated its targets for 2025–2030, projecting annual revenue growth of 5% to 6% in constant currencies.
Risks and Market Reaction
A significant risk factor for Novartis remains the pricing policy of the Trump administration, particularly the Most Favored Nation mechanism, which ties U.S. drug prices to those in other wealthy countries. CEO Vas Narasimhan warned that the industry would feel the full impact of this policy over the next 18 months, although its current effects are mainly limited to the Medicaid segment, which accounts for 5% to 10% of sales.
Following the Q1 results, Novartis shares fell nearly 4%, and the stock is now trading virtually unchanged year-to-date, reflecting a cautious market sentiment during this period of transformation in the company's product portfolio.
Technical Analysis
The daily chart for Novartis shares indicates a slowdown in the multi-month uptrend, which had previously driven the price from around CHF 88 to a peak above CHF 132 in early 2026. The recent session saw a sharp breakout below the previous consolidation zone, with the price dropping to CHF 111.18, breaking several support lines from the VWAP channel pattern. The RSI(14) oscillator fell to 28.63, entering the oversold zone below 30, a level that historically has preceded potential upward rebounds. The key support level is around CHF 97, defined by the Volume Profile and a significant trend line, while the nearest technical support is around CHF 108. Any potential rebound will face resistance at CHF 116, where the upper channel bands and recent consolidation zone converge.