With the pandemic years in the rearview mirror, some of the best pharma stocks should continue to perform well. For one, by 2030, the pharma industry could be worth nearly $1.6 trillion, according to Acumen Research and Consulting. Two, the best pharma stocks are still ranked as some of the safest, recession-resistant investments to own. After all, we can’t stop people from aging. Three, we can’t forget about secular tailwinds, such as population aging and growth. In fact, according to the Population Reference Bureau, the number of Americans aged 65 and older will likely double to 95 million by 2060. As this number continues to grow, we’ll see a need for more medication and treatment options. All of which will result in a bright future for pharmaceutical companies. That being said, let’s take a quick look at some of the biggest, and best pharma stocks to buy now.
|JNJ||Johnson & Johnson||$174.04|
Covid-19 vaccines have been good to pharmaceutical giant Pfizer (NYSE:PFE). In fact, those vaccines helped the company report better-than-expected third-quarter earnings and raise guidance for the year. For the quarter, the company posted an EPS of $1.78, as compared to the $1.39 expected by analysts. Revenues were up to $22.6 billion, as compared to expectations of $21 billion.
Pfizer said it now expects earnings per share of $6.40 to $6.50 for all of 2022, up from a previous forecast of $6.30 to $6.45. The company also raised its sales guidance, saying it expects full-year revenues of $99.5 billion to $102 billion. Driving the improved outlook is the company’s COVID-19 vaccine, which it expects to generate $34 billion in sales this year. That’s up $2 billion from an earlier estimate.
The upbeat guidance came days after Pfizer announced plans to quadruple the price of its COVID-19 vaccine to between $110 and $130 per dose once the U.S. government’s current purchase program expires. The price increase should drive revenue and earnings even higher moving forward. Pfizer’s stock is down 17% this year and trading at $46.80 per share, offering a nice entry point to investors.
While Moderna (NASDAQ:MRNA) had a rocky year, investors seem to be piling back into the name. Between Jan. and Nov., the stock fell from about $232.20 to a low of about $120. However, the stock has managed to recover to about $168.81 in recent weeks. That, despite missing earnings expectations on the top and bottom lines. The company also lowered its sales outlook, saying it expects $18 billion to $19 billion in revenue from its Covid-19 vaccine this year, down from an earlier estimate of $21 billion.
Analysts and investors seem to be responding positively to Moderna’s pipeline of drug candidates, many of which are being developed with other pharma companies. These include a vaccine against the Zika virus and cancer treatment.
Another one of the best pharma stocks is AbbVie (NYSE:ABBV). Since Jan., the stock rose from about $125 a share to a high of about $170, before backing off to $149.22. All as the company continues to benefit from sales of several blockbuster medications, primarily Humira which is used to treat rheumatoid arthritis. Other medications such as Skyrizi and Rinvoq that are used to treat psoriasis and arthritis also continue to sell well for the company. The stock’s 3.99% dividend yield also makes it popular with investors.
AbbVie’s most recent earnings missed the mark due to a dip in sales of the Chicago-based company’s normally popular aesthetic drugs such as Botox. The medical aesthetics division saw Q3 sales decline 7% as inflation led Americans to spend less on discretionary cosmetic procedures. The company characterized the sales decline as a “temporary headwind.” And while the impending loss of Humira’s patent protection continues to loom over AbbVie, investors seem happy to kick that can down the street.
Johnson & Johnson (JNJ)
Johnson & Jonson (NYSE:JNJ) is acquiring heart pump maker Abiomed for $16.6 billion. Once completed, the acquisition will help to boost growth at JNJ’s medical devices unit. The Abiomed purchase comes a year before Johnson & Johnson plans to spin off its consumer health business which includes popular products such as Tylenol and Aveeno skin moisturizer. With the consumer health spinoff expected by Nov. 2023, Johnson & Johnson is focusing on building its pharmaceuticals and medical device unit. Not that the pharma and devices business is not already robust. Most recently, the company reported Q3 earnings of $2.55 a share on revenues of $23.8 billion. That beat analyst calls for earnings of $2.48 a share on revenue of $23.4 billion.
Eli Lilly (LLY)
One of the oldest, and best pharma stocks on the market is Eli Lilly (NYSE:LLY). Founded by Civil War veteran, Col. Eli Lilly in May 1876, the company has become well known for its blockbuster drugs such as Prozac which is used to treat depression, as well as Cialis for erectile dysfunction. Those medications, and others, have powered Eli Lilly to annual sales of nearly $30 billion.
Like many of the other stocks on this list, shares of Eli Lilly are up big this year. Since Jan., LLY stock has gained 35% to now change hands at $367.95 a share. A good chunk of that comes courtesy of expectations for the company’s obesity drug, Tirzepatide, which some analysts say could be the biggest-selling drug ever produced. While not yet commercially available, Tirzepatide has been given Fast Track designation by the U.S. FDA. When and if, approved it could help the more than two billion adults worldwide considered overweight or obese.
BioNTech (NASDAQ:BNTX) is a German pharmaceutical company that partnered with Pfizer in the development of a Covid-19 vaccine. The Covid partnership has been extremely lucrative to BioNTech, which is otherwise known for developing medications to treat cancers and rare diseases. BNTX stock soared nearly 250% on the Nasdaq exchange during the pandemic, lifting the company’s market capitalization to more than $25 billion.
BNTX stock has come down 30% this year to trade at $160 a share. However, the stock remains up more than 1,000% in the past five years. And while sales of the Pfizer-BioNTech Covid-19 vaccine are starting to slow, the two companies are continuing to collaborate together, most notably on a new vaccine against influenza (flu) that utilizes messenger RNA (mRNA) technology that many industry observers see as the future of medicine.
Bristol-Myers Squibb (BMY)
New York City-based Bristol-Myers Squibb (NYSE:BMY) is another pharma stock that has ripped higher this year. So far in 2022, BMY stock has risen 30% to just over $80 a share. As with the other pharma companies listed here, Bristol-Myers Squibb has approved blockbuster drugs such as blood thinner Eliquis and the cancer drug Opdivo in its stable of products.
At the same time, Bristol-Myers Squibb also has a robust pipeline of drug candidates. The company currently has several new clinical trials underway, including many potential new cancer treatments. If all that weren’t enough, Bristol-Myers Squibb has also hiked its annual dividend for 13 consecutive years now. The company’s quarterly dividend payout has increased nearly 40% in the past five years and now yields 2.7% or a quarterly payment of 54 cents.