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Novartis AGLTS:0QLR +4.50%79 Forward Rate of Return (Yacktman) % is 4.45% as of Jun. 2026, which is 48% below its 10-year median of 8.48. GuruFocus rates LTS:0QLR with a GF Score™ of 79/100 and a GF Value™ of CHF107.79 (Modestly Overvalued). The stock has 5 warning signs investors should review. Among 635 Drug Manufacturers companies, Novartis AG ranks worse than 53.39% on this metric.
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Novartis AG's forward rate of return for was 4.45%.
The historical rank and industry rank for Novartis AG's Forward Rate of Return (Yacktman) % or its related term are showing as below:
LTS:0QLR'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 0.55 Med: 8.48 Max: 20.88
Current: 4.57
During the past 13 years, Novartis AG's highest Forward Rate of Return was 20.88. The lowest was 0.55. And the median was 8.48.
LTS:0QLR's Forward Rate of Return (Yacktman) % is ranked worse than 53.39% of 635
companies
in the Drug Manufacturers industry
Industry Median: 6.27
vs LTS:0QLR: 4.57
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
Novartis AG (LTS:0QLR) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Novartis AG Forward Rate of Return (Yacktman) % Related Terms
Novartis AG Forward Rate of Return (Yacktman) % Historical Data
* Premium members only.
The historical data trend for Novartis AG's Forward Rate of Return (Yacktman) % 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.
Novartis AG Forward Rate of Return (Yacktman) % Chart
LTS:0QLR vs LLY, JNJ, ABBV: Forward Rate of Return (Yacktman) % Comparison
For the Drug Manufacturers - General subindustry, Novartis AG's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % 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 Forward Rate of Return (Yacktman) % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Novartis AG's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Novartis AG's Forward Rate of Return (Yacktman) % falls into.
Novartis AG Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
Novartis AG's Forward Rate of Return of Jun. 2026 is
Forward Rate of Return
=
Normalized Free Cash Flow
/
Price
+
5-Year EBITDA Growth Rate
=
5.79371429
/
127.17
+
-0.0013
=
4.43 %
* 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.
What does a Forward Rate of Return (Yacktman) % of 4.45% mean?
Novartis AG (LTS:0QLR) has a Forward Rate of Return (Yacktman) % of 4.45% as of Jun. 2026. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Novartis AG and its competitors. This is 48% below median its historical median of 8.48. Over the past decade, Novartis AG's Forward Rate of Return (Yacktman) % has ranged from 0.55 to 20.88. According to the industry distribution chart, Novartis AG ranks #339 out of 635 companies in the Drug Manufacturers industry, placing it in the top 53.4%.
Is Novartis AG's Forward Rate of Return (Yacktman) % too high?
Novartis AG's current Forward Rate of Return (Yacktman) % of 4.45% is 48% below median its 10-year median of 8.48. Over the past 10 years, this metric has ranged from a low of 0.55 to a high of 20.88. The Drug Manufacturers industry median Forward Rate of Return (Yacktman) % is 6.27. Novartis AG's value of 4.45% is 29% below this industry median. Based on the distribution chart, Novartis AG ranks #339 out of 635 companies in the Drug Manufacturers industry, which is below the industry midpoint. Overall, Novartis AG has a GF Score™ of 79/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Novartis AG's Forward Rate of Return (Yacktman) % compare to LLY and JNJ?
According to the Drug Manufacturers industry distribution chart, Novartis AG ranks #339 out of 635 companies for Forward Rate of Return (Yacktman) %. This places Novartis AG in the lower half of its industry. The industry median Forward Rate of Return (Yacktman) % is 6.27. Novartis AG's value of 4.45% is 29% below this benchmark. Historically, Novartis AG's own Forward Rate of Return (Yacktman) % has ranged from 0.55 to 20.88 over the past decade. While the company's 10-year median is 8.48 vs. the industry median of 6.27, Novartis AG has consistently been below 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 Forward Rate of Return (Yacktman) % for a Drug Manufacturers company?
The median Forward Rate of Return (Yacktman) % among Drug Manufacturers companies is 6.27, based on 635 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Novartis AG's current Forward Rate of Return (Yacktman) % of 4.45% is 29% below 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 Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Novartis AG and its competitors. For the Drug Manufacturers industry, the median Forward Rate of Return (Yacktman) % is 6.27 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Novartis AG's current Forward Rate of Return (Yacktman) % is 4.45%, which is 48% below median its own 10-year median of 8.48. 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 (LTS:0QLR) is currently considered Modestly Overvalued. The stock's GF Value™ is CHF107.79, compared to a current price of CHF130.91 — trading 21.4% above its estimated fair value. The current Forward Rate of Return (Yacktman) % is 4.45%, which is 48% below median its 10-year median of 8.48 and 29% below the Drug Manufacturers industry median of 6.27. Novartis AG's overall GF Score™ is 79/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For Novartis AG (LTS:0QLR), the current Forward Rate of Return (Yacktman) % is 4.45% as of Jun. 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 (LTS:0QLR) Overvalued in 2026?
Based on GuruFocus' analysis, Novartis AG stock appears to be overvalued.
The current stock price of CHF130.91 is trading 21.4% above its estimated GF Value™ of CHF107.79.
GuruFocus considers Novartis AG to be Modestly Overvalued.
Key valuation signals for LTS:0QLR:
Forward Rate of Return (Yacktman) %: 4.45% (48% below median its 10-year median of 8.48)
GF Value™: CHF107.79 vs. price of CHF130.91 (21.4% above fair value)
Industry Position: 29% below the Drug Manufacturers median (#339 of 635)
No single metric tells the full story. See the LTS:0QLR 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.
79GF Score
Get the complete analysis for LTS:0QLR
Forward Rate of Return (Yacktman) % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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