Novartis AG (Novartis) reported marginal decline in total revenues in 2Q 09, in-line with our estimates. EBITDA level performance was in-line with our expectation, while EBIT level performance marginally exceeded our expectations in 2Q 09. Although we maintain our positive growth outlook for the cardiovascular and oncology portfolio of products, and the company's Research and Development (R&D) pipeline, we are likely to further revise downwards our estimates for Diovan and Glivec, going forward. However, at current price levels, we maintain our BUY rating for Novartis' ADR. We will reassess our target price and rating in our 2Q 09 update report. We expect to introduce a 6-12 investment horizon in our next update report as we now expect a significant negative currency impact on the Swiss stock over the medium term. However, we maintain our BUY rating based on our fundamental outlook. We will reassess our target price and rating in our 2Q 09 update report.

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