Novartis disappoints with its earnings, sending its stock down to a key support level 💥

Novartis (NOVN.CH) reported its first-quarter 2026 results, which disappointed investors and analysts.

• Net sales totaled $13.11 billion, representing a 1% year-over-year decline and falling short of the analysts' consensus estimate of $13.40 billion.

• Core operating profit fell by 12% to $4.9 billion, while the market had expected around $5.1 billion.

• The key reason for the poor results is the loss of patent exclusivity for three flagship drugs: the heart medication Entresto, whose sales plummeted by 42% to $1.31 billion; the blood disorder medication Promacta, which saw a 66% decline; and the leukemia medication Tasigna, which saw a 59% decline.

• The total revenue gap resulting from generic expansion is estimated at approximately $4 billion for the full year 2026.​

Despite a difficult start to the year, the company’s management is maintaining its full-year forecasts, projecting low single-digit growth in net sales and a low single-digit decline in core operating income. CFO Mukul Mehta emphasized that Q1 results were in line with the company’s internal expectations, and growth is expected to return in the second half of the year. The company is counting on an acceleration in sales of new priority drugs such as Kisqali, Pluvicto, Kesimpta, Scemblix, and Leqvio, which will partially offset generic erosion. Furthermore, Novartis signaled the possibility of raising its medium- and long-term growth forecasts once data from several key clinical trials becomes available in the second half of 2026. The company had previously updated its 2025–2030 target, projecting annual revenue growth of 5% to 6% in constant currencies.

A significant additional risk factor remains the Trump administration’s pricing policy, specifically the Most Favored Nation mechanism, which links drug prices in the U.S. to prices in other wealthy countries. CEO Vas Narasimhan warned that the industry will fully feel the impact of this policy over the next 18 months, and that its effect is currently limited mainly to the Medicaid segment, which accounts for 5 to 10% of sales. Novartis shares reacted to the Q1 results with a nearly 4% decline and are now trading virtually unchanged year-to-date, reflecting the market’s cautious approach to the company during this period of product portfolio transformation.

The D1 chart for Novartis shares shows a clear slowdown in the multi-month uptrend, which drove the price from around CHF 88 to a peak above CHF 132 reached in early 2026. Today’s session brought a sharp breakout below the previous consolidation zone, bringing the price down to 111.18 CHF, which represents a break of several support lines from the VWAP channel pattern visible on the chart. The most important technical signal comes from the RSI(14) oscillator, which fell to 28.63, entering deep into the oversold zone below 30—a level that, historically on this chart, has twice preceded a potential upward rebound (marked by purple rectangles in February and April 2025). The key support level remains the horizontal demand zone around 97 CHF, defined by the Volume Profile and the black trend line, where significant activity was concentrated prior to the breakout in mid-2025. The nearest technical support is around CHF 108, while any potential rebound will face resistance at the CHF 116 level, where the upper channel bands and the recent consolidation zone converge. 

Source: xStation