Novartis cut to Sell at Deutsche Bank in Q3 review

What happened

Deutsche Bank downgraded Novartis to Sell from Hold after reviewing Q3 2026 results. The analyst noted an earnings miss driven by a $2.2B charge for experimental drugs del-desiran and pelacarsen after late-stage trial setbacks, and cut the price target to CHF115 from CHF120 per share.

Confirmed

Global impact / market context

A downgrade to Sell tells investors the analyst expects the stock to fall. The lowered price target means less expected upside. The analyst sees no base case where Novartis avoids a patent cliff for Kisqali in 2031, which means lost sales when cheaper copies arrive.

Analyst inference

Novartis shares had climbed since the Q3 report and more than recovered losses from the trial misses, which the analyst calls incongruous. He also flags no key clinical events next year and possible earlier sales headwinds for Kisqali if Roche's giredestrant hits overall survival.

Analyst inference

What to watch

1. Watch whether Novartis shares keep rising after the Sell rating, since the analyst says the stock has more than retraced losses from the pelacarsen and del-desiran trial misses. Confirmed
2. Watch for clearer evidence on the Kisqali patent cliff in 2031, as the analyst sees no base case where Novartis avoids it and cites few key clinical events next year. Proposed
3. Watch Roche's giredestrant overall survival results, because the analyst says a hit there could bring earlier-than-expected sales headwinds for Kisqali, hurting Novartis revenue. Analyst inference

Evidence

• seekingalpha.com