Deutsche Bank Sells Novartis; Short Book Quietly Grows

Deutsche Bank cut NVS to Sell from Hold on October 30, the first outright bearish rating from a major bank since Goldman Sachs downgraded to Sell in September 2025. The stock gained 3.2% that day anyway. It has risen 6.4% over the past month, to $160.79.

The Deutsche Bank move matters because the consensus still leans buy. Four of the five tracked analysts rate NVS a Buy or equivalent. Morgan Stanley holds an Overweight with a $170 target. HSBC upgraded to Hold in September. Deutsche Bank is now the lone Sell.

Short Book Stirs After Earnings

The Q3 print on October 27 produced a modest 1.5% gain. Since then the short book has moved. Shares short reached 5.93 million as of October 30, up 10% in one week and up 14% over the past month. For a $306 billion company this remains a small position in absolute terms. The short score edged up to 33.9 from 30.6 a week earlier, reflecting the week's activity.

Availability in the lending pool stands at 712%, meaning roughly seven shares remain available for every one currently borrowed. That is tighter than it was. A week ago availability ran above 1,900%. The lending market is moving in one direction, but 712% still represents a well-supplied borrow. Cost to borrow has nearly doubled over the week to 0.50%, though it remains low by any historical standard and was above 0.65% as recently as October 1.

Options Tone Has Cooled

Pre-earnings the put/call ratio hit 2.32, close to its 52-week high of 2.56. It has since pulled back to 2.21, still above its 20-day average of 2.02 and roughly 1.5 standard deviations elevated. The most acute defensive hedging pressure has eased, but the ratio has not fully normalised.

BlackRock filed a Schedule 13G on October 27 disclosing a 7.1% stake, 145.2 million shares as last disclosed. UBS Asset Management holds 6.4% on a separately filed 13G. Both are passive disclosures. No Schedule 13D activist is on the register.

What Has Changed

The two previous ORTEX notes on NVS described a lending market running at over 2,000% availability and a short book that was "calm." Both have shifted. Availability has dropped from above 2,000% to 712% in a single week. Short shares are up 10%. These moves follow, rather than preceded, the post-earnings rally. Deutsche Bank's downgrade to Sell is the clearest change in the analyst picture.

• Short interest: 5.93 million shares, up 10% in one week
• Cost to borrow: 0.50%, up 97% week-on-week, still low in absolute terms
• Borrow availability: 712%, down from above 1,900% one week ago
• Put/call ratio: 2.21, above the 20-day average of 2.02
• Analyst ratings: 4 Buy, 1 Hold, 1 Sell (Deutsche Bank, added October 30)
• Next earnings: February 3, 2027