Amid this rapidly changing economic environment, healthcare is the sector that continues to demonstrate resilience and growth potential. Thus, investors could consider adding fundamentally sound healthcare stocks, Pfizer Inc. (PFE), Biogen Inc. (BIIB), and BioMarin Pharmaceutical Inc. (BMRN), to their portfolios that have high analyst price targets.
There is an increasing demand for healthcare services and products due to factors such as an aging global population, rising healthcare costs, and continuous breakthroughs in medical technology. With these factors prevailing, the global healthcare services market is anticipated to be valued at $22.57 trillion by 2031, exhibiting a CAGR of 8.3%.
Healthcare is a non-cyclical industry, meaning that regardless of economic conditions, the healthcare sector will be essential in today’s world. Moreover, recent developments in the medical industry, like gene editing and biotechnology, are creating new growth opportunities for investors. Revenue in the global biotech industry is expected to grow at a CAGR of 14% to reach $3.88 trillion by 2030.
Considering these factors, let’s take a look at the fundamentals of the three healthcare stock picks.
Pfizer Inc. (PFE)
PFE is a global leader in biopharmaceuticals, offering a wide range of medicines and vaccines across several therapeutic areas. Its diverse portfolio spans treatments for cardiovascular conditions, metabolic issues, migraines, women's health, and infectious diseases, including COVID-19 prevention and treatment. It also explores future mRNA and antiviral therapies and provides biosimilars for chronic immune and inflammatory conditions.
On August 27, PFE launched PfizerForAll, a user-friendly digital platform designed to make access to healthcare and managing health and wellness more seamless for people across the United States. This platform will offer people an easier way to connect to healthcare professionals on the same day, find and book vaccines, and receive tests and medications at home.
In the same month, PFE and BioNTech SE (BNTX) received the approval of the U.S. Food and Drug Administration (FDA) for the supplemental Biologics License Application for individuals 12 years of age and older, and granted emergency use authorization for individuals six months through 11 years of age of the companies’ Omicron KP.2-adapted 2024-2025 Formula COVID-19 vaccine. The company will begin shipping immediately to ensure robust supply and rapid access.
PFE's total revenues for the second quarter (ended June 30, 2024) increased 2.1% year-over-year to $13.28 billion. Its non-GAAP other income came in at $258 million compared to the prior-year quarter’s loss of $278 million. The company’s adjusted net income and adjusted EPS attributable stood at $3.40 billion and $0.60, respectively.
The company has updated its fiscal year 2024 financial guidance, increasing its revenue projection to a range of $59.50 billion to $62.50 billion, up from the previous estimate of $58.50 billion to $61.50 billion. Additionally, it has raised its adjusted EPS guidance to a new range of $2.45 to $2.65, higher than the prior forecast of $2.15 to $2.35.
Analysts expect PFE’s revenue for the fourth quarter (ending December 2024) to grow 26.3% year-over-year to $18 billion, while its EPS for the same period is expected to increase considerably from the prior year to $0.67.
Shares of PFE have surged 5.8% over the past three months to close the last trading session at $29.27. The 12-month median price target of $32.77 indicates a 12% upside potential from the last closing price. The price targets range from a low of $27 to a high of $45.
PFE’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
PFE has a B grade for Growth and Value. It is ranked #47 out of 161 stocks in the Medical - Pharmaceuticals industry. Click here to see the additional ratings for PFE (Momentum, Stability, Sentiment, and Quality).
Biogen Inc. (BIIB)
BIIB is a global biopharmaceutical company focused on discovering, developing, and delivering advanced therapies for people with serious and complex diseases worldwide. The company has a portfolio of medicines to treat multiple sclerosis (MS), spinal muscular atrophy (SMA), Alzheimer's disease, and amyotrophic lateral sclerosis (ALS).
On August 22, BIIB and Eisai Co., Ltd. announced that the Medicines and Healthcare products Regulatory Agency (MHRA) in Great Britain granted marketing authorization to its Leqembi®, the humanized amyloid-beta (Aβ) monoclonal antibody.
On July 30, BIIB, Beckman Coulter, Inc., and Fujirebio announced they would collaborate to potentially identify and develop accessible, minimally invasive blood-based biomarkers specific for tau-pathology in the brain. These tools have the potential to be used to stratify patients or monitor treatment response for a new generation of future therapies impacting tau pathology in Alzheimer’s disease.
For the second quarter of 2024, which ended on June 30, BIIB’s total revenues increased marginally year-over-year to $2.46 billion. Its non-GAAP total net income attributable for the quarter amounted to $770.90 million or $5.28 per share, representing increases of 31.9% and 31.3%, respectively, from the same period last year.
As per the updated financial guidance for the full year 2024, BIIB now forecasts non-GAAP EPS between $15.75 and $16.25, up from the previous estimate of $15 and $16.
Street expects BIIB’s revenue for the fiscal fourth quarter (ending December 2024) to increase 2.4% year-over-year to $2.44 billion. Its EPS for the same period is expected to register a 14.9% growth from the prior year, settling at $3.39. In addition, it surpassed the EPS estimates in three of the trailing four quarters, which is promising.
BIIB’s stock has declined 1.1% intraday to close the last trading session at $195.63. Its 12-month price target of $275.11 indicates a 40.6% potential upside. The price targets range from a low of $190 to a high of $342.
BIIB’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
It also has an A grade for Value and a B for Growth and Sentiment. Within the Biotech industry, it is ranked #7 out of 336 stocks. Click here to see BIIB’s ratings for Momentum, Stability, and Quality.
BioMarin Pharmaceutical Inc. (BMRN)
BMRN develops and commercializes therapies for people with serious and life-threatening rare diseases and medical conditions. The company is a biotechnology company addressing the root cause of genetic conditions.
On July 24, BMRN announced that the U.S. FDA approved BRINEURA (cerliponase alfa) for children under three years with neuronal ceroid lipofuscinosis type 2 (CLN2 disease). The approval expands the treatment to all ages, including presymptomatic children, to slow the loss of ambulation.
In the fiscal third quarter that ended on June 29, 2024, BMRN’s total revenue increased 19.6% year-over-year to $712.03 million. The company reported non-GAAP income from operations of $221.8 million, indicating 71.7% growth from the prior-year quarter. BMRN’s non-GAAP income came in at $250.70 million, up 79.6% year-over-year, while its non-GAAP EPS grew 77.8% from the year-ago value to $0.96.
According to the updated financial guidance for fiscal year 2024, the company’s revenue is now projected to be between $2.75 billion and $2.83 billion, with non-GAAP operating margin anticipated to fall between 26% and 27%. Its non-GAAP EPS is expected to range from $3.10 to $3.25.
The consensus revenue estimate of $704.18 million for the fiscal third quarter (ending September 2024) represents a 21.1% increase year-over-year. The consensus EPS estimate of $0.80 for the same quarter indicates a 74% improvement year-over-year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters.
Over the past three months, the stock has surged marginally to close the last trading session at $84.90. Its 12-month price target of $111.15 reflects a 30.9% potential upside. The price targets range from a low of $72 to a high of $132.
It’s no surprise that BMRN has an overall rating of B, equating to a Buy in our POWR Ratings system. It has an A grade for Growth and a B for Value and Sentiment. Out of 336 stocks in the Biotech industry, BMRN is ranked #15.
Beyond what is stated above, we’ve also rated BMRN for Momentum, Stability, and Quality. Get all BMRN ratings here.
What To Do Next?
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PFE shares closed at $29.27 on Friday, up $0.11 (+0.38%). Year-to-date, PFE has gained 7.74%, versus a 18.99% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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