Novartis lifts profit guidance as free cash flow drops 18%
Novartis raised its full-year core operating income outlook, but third-quarter free cash flow fell 18%, according to GuruFocus. Shares rose 1.36%.
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what happened
Novartis shares climbed 1.36% to $155.91 at 10:14 a.m. ET on October 27 after the company improved its profit outlook, GuruFocus reported, citing Reuters. The drugmaker also booked about $2.2 billion in charges linked to unsuccessful drug programs, which weighed on the picture.
Third-quarter core operating income rose 11% in dollars to $6.036 billion. Free cash flow moved the other way, falling 18% to $5.111 billion. Reported operating income was about $1.8 billion, after a $1.9 billion partial impairment.
In its earnings release, Novartis now expects full-year core operating income to be flat to low-single-digit growth at constant currency, up from its earlier forecast of a low-single-digit decline.
why it matters
The key question for investors is whether stronger adjusted profit can turn into better cash generation. The impairment is not a new cash payment, but it reflects capital tied to programs whose prospects weakened. GuruFocus notes the stock trades at 23.52 times earnings.
market impact
Novartis shares: higher profit outlook supports the stock, while weaker cash flow limits the gain
- Novartis shares mixed — the raised profit outlook supports the stock, while lower free cash flow holds it back
tags
instruments
sources
- Novartis Stocks Gain With Higher Guidance but Weaker Cash Generation — gurufocus.com, 27 October 2026 at 17:15 UTC
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