With healthcare companies investing their resources in drug development and the adoption of the latest technologies for improving patients’ lives and enhancing the system, the healthcare industry is booming. New-age solutions and technologies allow people to live longer, healthier, more productive, and more independent lives.
Given this backdrop, it could be wise to invest in quality healthcare stocks Johnson & Johnson (JNJ), Merck & Co., Inc. (MRK), and Bristol-Myers Squibb Company (BMY), which are revolutionizing patient care.
Revenue in the pharmaceuticals market is expected to reach $1.16 trillion in 2024. Further, the market is anticipated to exhibit growth at a CAGR of 4.7%, resulting in a market volume of $1.45 trillion by 2029. In global comparison, the United States is expected to generate the highest revenue of $630.30 billion in 2024 with its advanced healthcare infrastructure and strong R&D capabilities.
The healthcare sector is experiencing strong growth and is currently driven by medical advancements and the latest technologies. In recent times, technology has marked significant strides in healthcare, enabling health providers and hospitals to treat patients better and improve their lives with advanced equipment, systems, and new software.
Also, healthcare companies are investing aggressively in R&D to develop the latest drugs and solutions to aid the current healthcare system. Over 44 new medicines have been approved by the U.S. FDA in 2024, targeting conditions and diseases like non-small cell lung cancer, acute leukemia, metastatic breast cancer, and hypoparathyroidism.
Further, technologies like Artificial Intelligence (AI), telemedicine, 3D printing, virtual reality, robotics, and electronic health records are contributing to efficient operations and procedures, revolutionizing aspects like drug discovery, patient care, patient monitoring, and labor-related issues. Notably, the U.S. is the largest medical device market globally, comprising over 40% of the global medtech market.
Given these factors, let’s delve deeper into the fundamentals of the top Medical - Pharmaceuticals stocks, starting with the third choice.
Stock #3: Johnson & Johnson (JNJ)
JNJ researches, develops, manufactures, and sells various healthcare sector products internationally. The company operates in the Innovative Medicine and MedTech segments. It provides products for various therapeutic areas, like immunology, including rheumatoid arthritis, psoriatic arthritis, inflammatory bowel disease, and psoriasis.
On November 21, JNJ announced that Health Canada has issued a Notice of Compliance for CARVYKTI® (ciltacabtagene autoleucel) for treating adult patients with multiple myeloma who have received therapy and who are refractory to lenalidomide. With the approval, CARVYKTI® becomes the first and only B-cell Maturation Antigen-targeted approved therapy.
The approval marks a major milestone for patients with multiple myeloma. Clinical trials have shown that CARVYKTI® can significantly lower the risk of disease progression or death compared to the current standard of care.
On November 12, JNJ received the U.S. FDA approval for its OTTAVA™ robotic surgical system investigational device exemption (IDE), which allows the clinical trial to begin at U.S. sites. JNJ is building on its global portfolio of surgical technologies to advance OTTAVA and help hospitals provide robotic surgery benefits to more patients.
The system will benefit patients and surgeons and address the unmet needs that persist in robotic surgery.
During the third quarter that ended September 29, 2024, JNJ’s sales to customers increased 5.2% year-over-year to $22.47 billion. Its gross profit grew 5.2% from the year-ago value to $15.51 billion. The company’s adjusted net earnings from continuing operations came in at $5.88 billion and $2.42 per share for the quarter, respectively.
Street expects JNJ’s revenue for the fiscal year (ending December 2024) to increase 4.3% year-over-year to $88.79 billion, and its EPS for the same year is estimated to grow marginally year-over-year to $9.96. Further, the company has surpassed the consensus EPS estimates in each of the trailing four quarters.
JNJ’s stock has soared 1.1% over the past six months and 2.1% over the past year to close the last trading session at $153.
JNJ’s solid prospects are reflected in its POWR Ratings. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Quality, Stability, Sentiment, and Value. Within the Medical - Pharmaceuticals industry, JNJ is ranked #13 in the list of 155 stocks.
Click here to access additional JNJ ratings for Growth and Momentum.
Stock #2: Merck & Co., Inc. (MRK)
MRK operates as a healthcare company globally. The company operates in two segments: Pharmaceutical and Animal Health. It offers human health pharmaceutical products in the areas of oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular, and diabetes under the Keytruda, Bridion, Adempas, Lagevrio, Belsomra, Simponi, and Januvia brands.
On December 3, MRK was granted Breakthrough Therapy designation to sacituzumab tirumotecan (sac-TMT) by the U.S. FDA for treating patients with advanced or metastatic nonsquamous non-small cell lung cancer with epidermal growth factor receptor mutations.
Sac-TMT is an investigational trophoblast cell-surface antigen 2-directed antibody-drug conjugate being developed in collaboration with Kelun-Biotech.
On November 22, MRK announced that the National Medical Products Administration (NMPA) in China approved its WELIREG® (belzutifan), for the treatment of adult patients with von Hippel-Lindau (VHL) disease.
During the third quarter that ended September 30, 2024, MRK reported sales of $16.66 billion, up 4.4% year-over-year, and its income before taxes was $4.09 billion for the period. The company’s non-GAAP net income and non-GAAP EPS came in at $3.98 billion and 1.57 for the quarter, respectively.
The consensus EPS estimate of $1.81 for the fourth quarter (ending December 2024) represents a 5943.9% improvement year-over-year. The consensus revenue estimate of $15.47 billion for the same quarter reflects a 5.8% increase from last year. Also, MRK topped the consensus revenue and EPS estimates in all four trailing quarters.
MRK’s stock has plunged 3% over the past month to close the last trading session at $99.75.
MRK’s bright outlook is reflected in its POWR Ratings. It has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
MRK has an A grade for Quality and a B for Stability and Value. MRK is ranked #6 out of 155 stocks in the Medical – Pharmaceuticals industry.
Click here to access MRK’s other ratings for Growth, Momentum, and Sentiment.
Stock #1: Bristol-Myers Squibb Company (BMY)
BMY discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. The company provides products for hematology, oncology, cardiovascular, immunology, fibrotic, and neuroscience diseases.
On November 15, BMY received Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended approval for Opdivo® (nivolumab) plus Yervoy® (ipilimumab) for the first-line treatment of adult patients with microsatellite instability-high (MSI-H) or mismatch repair deficient.
On the same date, BMY received CHMP of the EMA recommended approval for repotrectinib, which is a next-generation tyrosine kinase inhibitor, for treating adult patients with ROS1-positive advanced non-small cell lung cancer and for treating adult and pediatric patients above 12 years of age with advanced solid tumors expressing a NTRK gene fusion.
BMY’s total revenues increased 8.4% year-over-year to $11.89 billion for the third quarter that ended September 30, 2024. Its non-GAAP gross profit grew 6.6% from the year-ago value to $9.04 billion. Furthermore, non-GAAP net earnings attributable to BMS and EPS totaled $3.65 billion and $1.80 for the quarter, respectively.
Analysts expect BMY’s revenue for the fourth quarter (ending December 2024) to increase marginally year-over-year to $11.54 billion, and its EPS is expected to be $1.47 for the ongoing quarter. Also, the company has topped the consensus revenue estimates in all of the trailing four quarters.
Shares of BMY have gained 31.7% over the past six months and 10.9% over the past year to close the last trading session at $56.65.
BMY’s POWR Ratings reflect its robust outlook. BMY has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
The stock has an A grade for Growth. It also has a B grade for Quality, Stability, Sentiment, and Value. BMY has topped among the 155 stocks in the same industry.
Click here to access all BMY ratings.
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JNJ shares were trading at $146.15 per share on Thursday afternoon, down $0.49 (-0.33%). Year-to-date, JNJ has declined -3.80%, versus a 28.50% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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