Novartis AGFRA:NOT +2.14%83 Operating Margin % is 31.31% as of Mar. 2026, which is 55% above its 10-year median of 20.20. GuruFocus rates FRA:NOT with a GF Score™ of 83/100 and a GF Value™ of €109.77 (Modestly Overvalued). The stock has 6 warning signs investors should review. Among 955 Drug Manufacturers companies, Novartis AG ranks better than 94.35% on this metric.
Operating Margin % is calculated as Operating Income divided by its Revenue. Novartis AG's Operating Income for the
three
months ended in Mar. 2026 was €3,663 Mil. Novartis AG's Revenue for the
three
months ended in Mar. 2026 was €11,698 Mil. Therefore, Novartis AG's Operating Margin % for the quarter that ended in Mar. 2026 was 31.31%.
Good Sign:
Novartis AG operating margin is expanding. Margin expansion is usually a good sign.
The historical rank and industry rank for Novartis AG's Operating Margin % or its related term are showing as below:
FRA:NOT'
s Operating Margin % Range Over the Past 10 Years
Min: 16.72 Med: 20.2 Max: 31.13
Current: 30.44
FRA:NOT's Operating Margin % is ranked better than 94.35% of 955
companies
in the Drug Manufacturers industry
Industry Median: 7.45
vs FRA:NOT: 30.44
Novartis AG's 5-Year Average Operating Margin % Growth Rate was 8.60% per year.
Novartis AG's Operating Income for the
three
months ended in Mar. 2026 was €3,663 Mil.
Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2026 was €14,803 Mil.
Novartis AG (FRA:NOT) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Novartis AG Operating Margin % Related Terms
Novartis AG Operating Margin % Historical Data
* Premium members only.
The historical data trend for Novartis AG's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
FRA:NOT vs LLY, JNJ, ABBV: Operating Margin % Comparison
For the Drug Manufacturers - General subindustry, Novartis AG's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Novartis AG Operating Margin % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Novartis AG's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Novartis AG's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Novartis AG's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Novartis AG (FRA:NOT) has a Operating Margin % of 31.31% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Novartis AG and its competitors. This is 55% above median its historical median of 20.20. Over the past decade, Novartis AG's Operating Margin % has ranged from 16.72 to 31.13. According to the industry distribution chart, Novartis AG ranks #54 out of 955 companies in the Drug Manufacturers industry, placing it in the top 5.7%.
Is Novartis AG's Operating Margin % too high?
Novartis AG's current Operating Margin % of 31.31% is 55% above median its 10-year median of 20.20. Over the past 10 years, this metric has ranged from a low of 16.72 to a high of 31.13. The Drug Manufacturers industry median Operating Margin % is 7.45. Novartis AG's value of 31.31% is 320.3% above this industry median. Based on the distribution chart, Novartis AG ranks #54 out of 955 companies in the Drug Manufacturers industry, which is in the top quartile — a strong position relative to peers. Overall, Novartis AG has a GF Score™ of 83/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Novartis AG's Operating Margin % compare to LLY and JNJ?
According to the Drug Manufacturers industry distribution chart, Novartis AG ranks #54 out of 955 companies for Operating Margin %. This places Novartis AG in the top 6% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 7.45. Novartis AG's value of 31.31% is 320.3% above this benchmark. Historically, Novartis AG's own Operating Margin % has ranged from 16.72 to 31.13 over the past decade. While the company's 10-year median is 20.20 vs. the industry median of 7.45, Novartis AG has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Drug Manufacturers company?
The median Operating Margin % among Drug Manufacturers companies is 7.45, based on 955 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Novartis AG's current Operating Margin % of 31.31% is 320.3% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Novartis AG and its competitors. For the Drug Manufacturers industry, the median Operating Margin % is 7.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Novartis AG's current Operating Margin % is 31.31%, which is 55% above median its own 10-year median of 20.20. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Novartis AG stock overvalued right now?
Based on GuruFocus' analysis, Novartis AG (FRA:NOT) is currently considered Modestly Overvalued. The stock's GF Value™ is €109.77, compared to a current price of €131.52 — trading 19.8% above its estimated fair value. The current Operating Margin % is 31.31%, which is 55% above median its 10-year median of 20.20 and 320.3% above the Drug Manufacturers industry median of 7.45. Novartis AG's overall GF Score™ is 83/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Novartis AG (FRA:NOT), the current Operating Margin % is 31.31% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Novartis AG (FRA:NOT) Overvalued in 2026?
Based on GuruFocus' analysis, Novartis AG stock appears to be overvalued.
The current stock price of €131.52 is trading 19.8% above its estimated GF Value™ of €109.77.
GuruFocus considers Novartis AG to be Modestly Overvalued.
Key valuation signals for FRA:NOT:
Operating Margin %: 31.31% (55% above median its 10-year median of 20.20)
GF Value™: €109.77 vs. price of €131.52 (19.8% above fair value)
Industry Position: 320.3% above the Drug Manufacturers median (#54 of 955)
No single metric tells the full story. See the FRA:NOT stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Novartis develops and manufactures innovative drugs. Key areas of drug development are oncology, immunology, neuroscience, respiratory, and cardiovascular, renal, and metabolic. It also has an established medicines business, which includes off-patent franchises. The company sells its products globally, with the United States constituting close to one-third of total revenue.
83GF Score
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