Halister News

(Bloomberg) -- Novartis shares rise 2.4% as of 10:11am Zurich time, biggest intraday advance in 6 weeks, according to Bloomberg data.

• Biggest gainer in SMI Index, second-biggest in SXDP Index
• Trading volume 46% of 3mo. avg

KEPLER CHEUVREUX (Buy, PT CHF90)

• Relief is due, R&D update (webcast from 1pm today) key to shaping currently minimal consensus expectations for pipeline, analyst David Evans writes in client note
• Buyback should support views on co.’s use of capital and is a sign of confidence in its own pipeline and growth prospects
  • Should add 1%-2% to 2017 and 2018 EPS
• Although Entresto remains disappointing, in reality Cosentyx upgrades should more than offset any new Entresto changes
• Co. now formally considering options for Alcon, its problem division, seen as positive
• New FX impact guidance is 1% less negative (-3%) than before

BAADER HELVEA (Buy, PT CHF85)

• Results in-line with expectations, heading into a transition yr, analyst Bruno Bulic writes in client note
• Margin improved despite growth investments in Alcon and Entresto, offset by productivity improvements and a good performance from the pharma and Sandoz divisions

CITI (Neutral, PT CHF79)

• Co. needs a transaction to restore mid-term competitive profile of its oncology division, analyst Andrew Baum writes in client note
  • Don’t expect activity until the unblinding of both internal and competitive clinical data in first part of 2017
• While there are few negative surprises in release, there is also little to celebrate
• Sees potential for upside surprise from Ph III outcome trial for serelaxin in acute HF expected in 2Q, as well as canakinumab data in CV risk reduction expected in 2H

CREDIT SUISSE (Neutral, PT CHF77)

• Buyback is positive, but unclear whether this is on top of usual $1b buyback to mitigate stock option dilution, analysts including Rebekah Harper write in note
• Cosentyx performed well, but competition set to intensify in 2H 2017 from Taltz in psoriatic arthritis and IL23 class
• Glivec current revenue is unsustainable during 2017 as multisource generics enter mkt

BERENBERG (Hold, PT CHF80)

• Sentiment has been weakening on Novartis and results are unlikely to help, writes analyst Alistair Campbell
  • Co. will have to executive extremely well in R&D to navigate 2 or 3 looming generic in coming years
• Alcon performance “very disappointing, only redeemed by surprisingly low central corporate costs”
• Cosentyx, Entresto tell two different tales of launch drugs
• 2017 outlook is challenging, sales and operating profit to be negatively impacted by FX
  • Both lines are likely to be below consensus that had been dropping anyway in recent weeks

VONTOBEL (Hold, PT CHF81)

• While overall financial performance for 4Q is in line with expectations, Alcon and Entresto are doing worse than already low expectations
• Dividend increase slightly below expectation, but co. announced share buyback
• Alcon’s growth acceleration plan still doesn’t deliver and continued investments keep lowering margins

BRYAN GARNIER (Neutral, Fair Value CHF78 from CHF80)

• Analyst Eric Le Berrigaud concludes little surprise in FY numbers, says 2017 will not be bright
• $5b buyback should limit estimated 2017 core EPS decline
• Says Sandoz guidance looks especially conservative, but notes uncertain timings of approvals and launches; sees upside