Amid rising global medical needs, the pharmaceutical industry is expected to witness robust growth in the coming years. Moreover, healthcare is considered relatively resilient amid market downturns. So, given the economic uncertainties, investors could consider buying quality pharmaceutical stocks such as Pfizer (PFE), Novartis (NVS), and Bristol-Myers Squibb (BMY) this week. These stocks are trading under $100. Keep reading….
The pharmaceutical industry flourished during the COVID-19 pandemic. Amid surging medical needs worldwide, the pharmaceutical industry is expected to witness continued growth. For October 2022, pharmaceuticals and medicines manufacturing shipments came in at $22.52 billion, up from $22.48 billion in September 2022.
Moreover, overwhelming drug demand is expected to bode well for the pharmaceutical industry. The global drug formulation market is projected to grow at a CAGR of 5.6% from 2022 to 2032.
In addition, investors’ interest in pharmaceutical stocks is evident from the VanEck Vectors Pharmaceutical ETF’s (PPH) 5% gains over the past month. Historically, the healthcare industry has performed relatively well during market downturns due to the inelastic demand for its products and services. Thus, it acts as a way for investors to hedge against recessionary pressures.
Given the persistent macroeconomic uncertainties, quality pharmaceutical stocks Pfizer Inc. (PFE), Novartis AG (NVS), and Bristol-Myers Squibb Company (BMY) could be ideal buys this week. These stocks are trading under $100.
Pfizer Inc. (PFE)
PFE discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers medicines and vaccines in various therapeutic areas.
On December 14, 2022, PFE and China Meheco Group Co Ltd. (China Meheco) signed an agreement. China Meheco will import and distribute PFE’s oral COVID-19 treatment Paxlovid in mainland China amid a rapid resurgence of covid cases in the country. This deal is expected to generate additional revenue for PFE.
Moreover, on December 8, 2022, PFE and BioNTech SE (BNTX) achieved the U.S. Food and Drug Administration’s Emergency Use Authorization for their Omicron BA.4/BA.5-adapted bivalent COVID-19 vaccine. It is the third 3-µg dose in the three-dose primary series for children between 6 months and four years and boosts the companies’ covid portfolio.
PFE’s forward EV/Sales of 2.89x is 24.3% lower than the industry average of 3.82x, while its forward Price/Sales of 2.88x is 31.3% lower than the industry average of 4.19x.
For its third quarter that ended October 2, 2022, PFE’s United States segment revenues came in at $13.85 billion, up 97.3% year-over-year. Its non-GAAP net income came in at $10.17 billion, up 39.7% year-over-year. Also, its non-GAAP EPS came in at $1.78, up 40.2% year-over-year.
PFE’s revenue is expected to increase 23.3% year-over-year to $100.24 billion in 2022. Its EPS is expected to increase 46.4% year-over-year to $6.47 in 2022. It surpassed EPS estimates in all four trailing quarters. Over the past month, the stock has gained 7% to close the last trading session at $51.40.
PFE’s POWR Ratings reflect its promising outlook. It has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
PFE has a B grade for Growth, Value, Sentiment, and Quality. It is ranked #2 out of 159 stocks in the Medical – Pharmaceuticals industry. Click here for additional PFE ratings (Momentum and Stability).
Novartis AG (NVS)
Headquartered in Basel, Switzerland, NVS researches, develops, manufactures, and markets healthcare products worldwide. The company operates through two segments, Innovative Medicines, and Sandoz.
On December 6, 2022, NVS and MorphoSys AG’s (MOR) fully-owned subsidiary Constellation Pharmaceuticals, Inc. entered into a global licensing agreement. The agreement aims to enhance research and develop and commercialize pre-clinical inhibitors of a novel cancer target. This is a milestone partnership in oncology.
NVS’ forward EV/EBITDA of 11.97x is 9% lower than the industry average of 13.16x. Its forward Price/Sales of 3.78x is 9.7% lower than the industry average of 4.19x.
NVS’ third-party net sales in the U.S. came in at $4.12 billion for the third quarter ended September 30, 2022, up 8.4% year-over-year. Its total cardiovascular net sales came in at $1.17 billion, up 25.8% year-over-year. Moreover, its core basic EPS came in at $1.58, up marginally on a sequential basis.
NVS’ revenue is expected to increase 3.5% year-over-year to $12.97 billion for the quarter ending March 2023. Its EPS is expected to increase 6.2% year-over-year to $1.55 for the same period. It surpassed EPS estimates in three of four trailing quarters. Over the past month, the stock has gained 8.3% to close the last trading session at $90.48.
NVS’ overall A rating represents a Strong Buy in our POWR Ratings system. The stock has an A grade for Stability and a B for Value, Sentiment, and Quality. It is ranked #13 in the same industry.
To see the additional POWR Ratings for NVS (Growth and Momentum), click here.
Bristol-Myers Squibb Company (BMY)
BMY discovers, develops, licenses, manufactures, and markets biopharmaceutical products worldwide. It offers products for hematology, oncology, cardiovascular, immunology, fibrotic, neuroscience, and covid-19 diseases.
On November 29, 2022, BMY and Envisagenics, an Artificial Intelligence -driven biotechnology company, announced their research collaboration agreement. Under the agreement, Envisagenics’ SpliceCore® AI platform will fortify BMY’s oncology portfolio.
Also, on November 10, 2022, BMY received Health Canada’s approval for its CAMZYOSTM (mavacamten capsules) to treat symptomatic obstructive hypertrophic cardiomyopathy. This marks yet another significant achievement for the company.
BMY’s forward EV/EBITDA of 9.52x is 27.7% lower than the industry average of 13.16x. Its forward Price/Sales of 3.55x is 15.2% lower than the industry average of 4.19x.
BMY’s total U.S. revenues came in at $5.21 billion for the third quarter that ended September 30, 2022, up 16.6% year-over-year. Its net earnings came in at $1.61 billion, up 3.9% year-over-year, while its non-GAAP EPS came in at $1.99, up 3.1% year-over-year.
Street expects BMY’s revenue to increase 2.7% year-over-year to $47.11 billion in 2023. Its EPS is expected to increase 4.5% year-over-year to $7.95 in 2023. It surpassed EPS estimates in all four trailing quarters. Over the past year, the stock has gained 18.2% to close the last trading session at $73.49.
It’s no surprise that BMY has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Value and a B for Stability, Sentiment, and Quality.
BMY is ranked #3 in the same industry. Click here to see the additional POWR Ratings for BMY (Growth and Momentum).
PFE shares rose $0.10 (+0.19%) in premarket trading Monday. Year-to-date, PFE has declined -10.13%, versus a -18.37% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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