Stellantis stock jumps as Morgan Stanley says share gains are finally taking place
-
Pharma stocks are surging after Trump’s deal with Pfizer.
-
The rally shows signs of extending for US-listed pharma names.
-
So which US pharma stocks offer the best buys right now?
- Get all the tools you need to easily build an outperforming portfolio by subscribing to InvestingPro today.
Pharmaceutical stocks rose sharply on Thursday, boosted by a nearly 7% rally from Pfizer, which reached a key agreement with the Trump administration.
Under the terms of the agreement, Pfizer will sell the "vast majority" of its primary care treatments and some of its specialty products at a 50% to 85% discount on the new government direct drug purchasing website, TrumpRx. Pfizer will also sell lower-cost drugs to state Medicaid programs.
The deal has had a profoundly positive impact because it will allow Pfizer to avoid the 100% tariffs on pharmaceuticals that were set to take effect yesterday.
At the same time, these duties have been postponed for other pharmaceutical companies, to give them time to conclude similar agreements with the US government.
Against this backdrop, Pfizer was far from the only US-listed pharmaceutical stock to soar yesterday: Biogen Inc (NASDAQ: BIIB) jumped +10.1%. In comparison Eli Lilly and Company (NYSE:LLY) gained +8.2%, Merck & Company Inc (NYSE:MRK) +7.4%, Moderna Inc (NASDAQ:MRNA) +6.8%, and so on.
It’s worth noting that pharma stocks are bouncing back all the more readily, given that they had been heavily punished in recent weeks, under the threat of Trump’s tariffs.
6 large-cap pharma stocks to profit from an industry rebound
As the industry horizon brightens, we set out to find opportunities to capitalize on it, using the Investing.com screener.
Specifically, we launched a search for stocks meeting the following criteria:
- Pharmaceuticals industry
- Market capitalization in excess of $10 billion
- Upside potential of over 20% according to InvestingPro Fair Value
- InvestingPro Financial Health Score above 2.5/5
Reminders: InvestingPro Fair Value calculates an intelligent average of several recognized valuation models for each stock on the market. The Health Score, on the other hand, is based on several key financial metrics and peer comparisons to assess the strength of a company’s finances.
This research has enabled us to identify 6 stocks:
WARNING: Although the screener’s basic functions are available free of charge, in this search we used metrics reserved for InvestingPro subscribers, Pro+ plan. If you have a Pro+ subscription, click here to be directed to this search recorded directly on the screener.
We can see that these pharmaceutical stocks are undervalued by between 22.8% and 36.2% according to InvestingPro Fair Value.
In the search results, we have also shown the potential of each stock according to the analysts’ average target, which has enabled us to see that, in addition to being significantly undervalued, some of the stocks we have identified also have very high potential according to the analysts, including one which they believe could gain +74.1% .
New IA-managed strategy targets healthcare stocks
With the horizon brightening for the pharmaceutical industry, and positive seasonality and Fed rate cuts also contributing to general bullish sentiment, the stocks identified in this article could prove to be wise bets for the coming weeks.
For investors wishing to broaden their investments to the entire healthcare sector, however, there is another way to find the best stocks to buy. InvestingPro’s ProPicks IA has just launched "Healthcare Heroes", a strategy specializing in US-listed healthcare stocks.
This strategy, whose 10-year backtest shows a gain of over +630%, or 519% more than the S&P 500 Healthcare index, was launched in real-life conditions just yesterday, and boasts a "low" risk profile:
The strategy, which joins the many other thematic and regional strategies available on InvestingPro, offers InvestingPro subscribers 15 Healthcare stocks to watch over the coming weeks.
Join us on InvestingPro and discover just how easy investing can be when you have the right tools at your fingertips.