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Novartis AGFRA:NOT +1.12%81 ROC (Joel Greenblatt) % is 136.93% as of Mar. 2026, which is 75% above its 10-year median of 78.35. GuruFocus rates FRA:NOT with a GF Score™ of 81/100 and a GF Value™ of €111.73 (Modestly Overvalued). The stock has 7 warning signs investors should review. Among 983 Drug Manufacturers companies, Novartis AG ranks better than 95.83% on this metric.
Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits). He defines ROC (Joel Greenblatt) % as EBIT divided by the total of Property, Plant and Equipment and net working capital. Novartis AG's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2026 was 136.93%.
The historical rank and industry rank for Novartis AG's ROC (Joel Greenblatt) % or its related term are showing as below:
FRA:NOT'
s ROC (Joel Greenblatt) % Range Over the Past 10 Years
Min: 54.58 Med: 78.35 Max: 190.7
Current: 140.21
During the past 13 years, Novartis AG's highest ROC (Joel Greenblatt) % was 190.70%. The lowest was 54.58%. And the median was 78.35%.
FRA:NOT's ROC (Joel Greenblatt) % is ranked better than 95.83% of 983
companies
in the Drug Manufacturers industry
Industry Median: 11.46
vs FRA:NOT: 140.21
Novartis AG's 5-Year average Growth Rate of ROC (Joel Greenblatt) % was 7.60% per year.
Novartis AG (FRA:NOT) ROC (Joel Greenblatt) % Explanation
The way Joel Greenblatt defines Return on Capital is a more accurate measure of how efficiently the company generates returns onthe capital actually invested in the business. EBIT is used instead of net income because the tax and interest payment may be affected by factors other than the core business operation. Intangible assets are not included in the calculation because they don't need to be replaced.
Novartis AG ROC (Joel Greenblatt) % Historical Data
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The historical data trend for Novartis AG's ROC (Joel Greenblatt) % 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: ROC (Joel Greenblatt) % Comparison
For the Drug Manufacturers - General subindustry, Novartis AG's ROC (Joel Greenblatt) %, along with its competitors' market caps and ROC (Joel Greenblatt) % 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 ROC (Joel Greenblatt) % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Novartis AG's ROC (Joel Greenblatt) % distribution charts can be found below:
* The bar in red indicates where Novartis AG's ROC (Joel Greenblatt) % falls into.
Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits) . He defines Return on Capital as follows:
EBIT stands for Earnings Before Interest and Taxes.
Fixed Assets are also known as non-current assets. They include the Property, Plant and Equipment that the firm needs in its operation.
GuruFocus calculates net working capital as: (Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Deferred Revenue + Other Current Liabilities). We're trying to account for OPERATING assets and liabilities (part of daily business) when calculating working capital. Cash and marketable securities are considered NON-OPERATING assets and are not included in calculation. We will also back out all interest bearing debt, short term debt and the portion of long term debt that is due in the current period from the current liabilities. This debt will be considered when computing cost of capital and it would be inappropriate to count it twice.
Note:
The EBIT data used here is four times the quarterly (Mar. 2026) EBIT data.
* 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 ROC (Joel Greenblatt) % of 136.93% mean?
Novartis AG (FRA:NOT) has a ROC (Joel Greenblatt) % of 136.93% as of Mar. 2026. Joel Greenblatt's return on capital is the ratio of EBIT to average fixed assets and net working capital. View historical data on Novartis AG and its competitors. This is 75% above median its historical median of 78.35. Over the past decade, Novartis AG's ROC (Joel Greenblatt) % has ranged from 54.58 to 190.70. According to the industry distribution chart, Novartis AG ranks #41 out of 983 companies in the Drug Manufacturers industry, placing it in the top 4.2%.
Is Novartis AG's ROC (Joel Greenblatt) % too high?
Novartis AG's current ROC (Joel Greenblatt) % of 136.93% is 75% above median its 10-year median of 78.35. Over the past 10 years, this metric has ranged from a low of 54.58 to a high of 190.70. The Drug Manufacturers industry median ROC (Joel Greenblatt) % is 11.46. Novartis AG's value of 136.93% is 1094.9% above this industry median. Based on the distribution chart, Novartis AG ranks #41 out of 983 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 81/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Novartis AG's ROC (Joel Greenblatt) % compare to LLY and JNJ?
According to the Drug Manufacturers industry distribution chart, Novartis AG ranks #41 out of 983 companies for ROC (Joel Greenblatt) %. This places Novartis AG in the top 4% of its industry — outperforming the majority of peers. The industry median ROC (Joel Greenblatt) % is 11.46. Novartis AG's value of 136.93% is 1094.9% above this benchmark. Historically, Novartis AG's own ROC (Joel Greenblatt) % has ranged from 54.58 to 190.70 over the past decade. While the company's 10-year median is 78.35 vs. the industry median of 11.46, 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 ROC (Joel Greenblatt) % for a Drug Manufacturers company?
The median ROC (Joel Greenblatt) % among Drug Manufacturers companies is 11.46, based on 983 companies in the industry. Companies in the top quartile (top 25%) have a ROC (Joel Greenblatt) % significantly above this median, while those in the bottom quartile fall well below. However, ROC (Joel Greenblatt) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Novartis AG's current ROC (Joel Greenblatt) % of 136.93% is 1094.9% 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 ROC (Joel Greenblatt) % mean?
A high ROC (Joel Greenblatt) % can signal that a stock is expensive relative to its fundamentals. Joel Greenblatt's return on capital is the ratio of EBIT to average fixed assets and net working capital. View historical data on Novartis AG and its competitors. For the Drug Manufacturers industry, the median ROC (Joel Greenblatt) % is 11.46 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Novartis AG's current ROC (Joel Greenblatt) % is 136.93%, which is 75% above median its own 10-year median of 78.35. 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 €111.73, compared to a current price of €135.38 — trading 21.2% above its estimated fair value. The current ROC (Joel Greenblatt) % is 136.93%, which is 75% above median its 10-year median of 78.35 and 1094.9% above the Drug Manufacturers industry median of 11.46. Novartis AG's overall GF Score™ is 81/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC (Joel Greenblatt) % calculated?
ROC (Joel Greenblatt) % is calculated from a company's financial statements. For Novartis AG (FRA:NOT), the current ROC (Joel Greenblatt) % is 136.93% 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 €135.38 is trading 21.2% above its estimated GF Value™ of €111.73.
GuruFocus considers Novartis AG to be Modestly Overvalued.
Key valuation signals for FRA:NOT:
ROC (Joel Greenblatt) %: 136.93% (75% above median its 10-year median of 78.35)
GF Value™: €111.73 vs. price of €135.38 (21.2% above fair value)
Industry Position: 1094.9% above the Drug Manufacturers median (#41 of 983)
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.
81GF Score
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