Novartis (NOVN.S): Current multiple better reflects the risks, but we still see relative downside; Sell

Following a string of net negative pipeline updates since the start of September 2026, Novartis shares have de-rated, and while the shares better reflect the long-term patent loss risks, the stock still trades at around a 5% premium to the EU Large Cap Pharma sector, while we believe the stock should trade in line with the sector. Despite the multiple re-set, we still see some (although less) relative downside and maintain our Sell rating, lowering our 12-month target price to CHF110/$136 (prev. CHF113/$139). Key remaining 2026 catalysts include detailed remibrutinib data in MS at MSToronto2026 (October 21-23), where we see balanced risk/reward after the positive share price move, and the annual Meet Novartis Management event (November 19th). With c.$40bn of sales at risk across 2031-36 and following pipeline disappointments, we believe investors are unlikely to give credit to management's MSD growth ambition beyond 2030, particularly as a good proportion will need to come from externa