Novartis AG (ADR) (NYSE:NVS) — This Switzerland-based health care company is a leading international provider of pharmaceuticals, generic drugs, and consumer and animal health products.
On Tuesday, the company announced a drop in fourth-quarter profits, but NVS stock rose 2.5% on the day. Full-year 2014 earnings easily beat Wall Street’s expectations, with core EPS increasing 4.4% to $5.23 versus a consensus expectation of $5.19. Revenue of $58 billion was up 3% and in line with estimates. More importantly, the company stated that sales are expected to grow in the mid-single digits in 2015.
Following the earnings report, S&P Capital IQ raised its 2015 EPS estimate to $5.50 from a previous $5.36. Its analysts maintained their “buy” rating on NVS stock and $112 12-month target, which is 13% above current prices.
Novartis also announced last week that the FDA approved its vaccine for the prevention of meningitis B, which is a leading cause of bacterial meningitis in the United States.
NVS stock has been trading in a well-defined bull channel since October 2012. On Jan. 20, it jumped to a new all-time high over $102, which popped it above its bull channel. However, shares quickly fell back into the channel where they have support at the 50-day moving average at $95.32. That is my buy under price for NVS stock.
The MACD indicator is bullish. Also note that NVS stock reacts well to my proprietary indicator, the Collins-Bollinger Reversal (CBR), which is noted on the chart.
The trading target for NVS stock is $110 within three months, which would provide a return of more than 15%, plus a dividend yield of 2.8%.
