Novartis AGFRA:NOT +2.14%83 ROE % is 30.04% as of Mar. 2026, which is 77% above its 10-year median of 16.98. 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 936 Drug Manufacturers companies, Novartis AG ranks better than 94.23% on this metric.
ROE % is calculated as Net Income divided by its average Total Stockholders Equity over a certain period of time. Novartis AG's annualized net income for the quarter that ended in Mar. 2026 was €10,920 Mil. Novartis AG's average Total Stockholders Equity over the quarter that ended in Mar. 2026 was €36,354 Mil. Therefore, Novartis AG's annualized ROE % for the quarter that ended in Mar. 2026 was 30.04%.
The historical rank and industry rank for Novartis AG's ROE % or its related term are showing as below:
FRA:NOT'
s ROE % Range Over the Past 10 Years
Min: 8.95 Med: 16.98 Max: 39.3
Current: 31.74
During the past 13 years, Novartis AG's highest ROE % was 39.30%. The lowest was 8.95%. And the median was 16.98%.
FRA:NOT's ROE % is ranked better than 94.23% of 936
companies
in the Drug Manufacturers industry
Industry Median: 5.865
vs FRA:NOT: 31.74
Novartis AG (FRA:NOT) ROE % Explanation
ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
Note:
The net income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* 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.
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.
Novartis AG ROE % Related Terms
Novartis AG ROE % Historical Data
* Premium members only.
The historical data trend for Novartis AG's ROE % 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.
For the Drug Manufacturers - General subindustry, Novartis AG's ROE %, along with its competitors' market caps and ROE % 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 ROE % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Novartis AG's ROE % distribution charts can be found below:
* The bar in red indicates where Novartis AG's ROE % falls into.
* 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.
In the calculation of annual ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
ROE % is displayed in the 30-year financial page.
Novartis AG (FRA:NOT) has a ROE % of 30.04% as of Mar. 2026. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Novartis AG and its competitors. This is 77% above median its historical median of 16.98. Over the past decade, Novartis AG's ROE % has ranged from 8.95 to 39.30. According to the industry distribution chart, Novartis AG ranks #54 out of 936 companies in the Drug Manufacturers industry, placing it in the top 5.8%.
Is Novartis AG's ROE % too high?
Novartis AG's current ROE % of 30.04% is 77% above median its 10-year median of 16.98. Over the past 10 years, this metric has ranged from a low of 8.95 to a high of 39.30. The Drug Manufacturers industry median ROE % is 5.87. Novartis AG's value of 30.04% is 412.2% above this industry median. Based on the distribution chart, Novartis AG ranks #54 out of 936 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 ROE % compare to LLY and JNJ?
According to the Drug Manufacturers industry distribution chart, Novartis AG ranks #54 out of 936 companies for ROE %. This places Novartis AG in the top 6% of its industry — outperforming the majority of peers. The industry median ROE % is 5.87. Novartis AG's value of 30.04% is 412.2% above this benchmark. Historically, Novartis AG's own ROE % has ranged from 8.95 to 39.30 over the past decade. While the company's 10-year median is 16.98 vs. the industry median of 5.87, 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 ROE % for a Drug Manufacturers company?
The median ROE % among Drug Manufacturers companies is 5.87, based on 936 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Novartis AG's current ROE % of 30.04% is 412.2% 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 ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Novartis AG and its competitors. For the Drug Manufacturers industry, the median ROE % is 5.87 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Novartis AG's current ROE % is 30.04%, which is 77% above median its own 10-year median of 16.98. 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 ROE % is 30.04%, which is 77% above median its 10-year median of 16.98 and 412.2% above the Drug Manufacturers industry median of 5.87. 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 ROE % calculated?
ROE % is calculated from a company's financial statements. For Novartis AG (FRA:NOT), the current ROE % is 30.04% 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:
ROE %: 30.04% (77% above median its 10-year median of 16.98)
GF Value™: €109.77 vs. price of €131.52 (19.8% above fair value)
Industry Position: 412.2% above the Drug Manufacturers median (#54 of 936)
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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