Despite the market’s hot year-to-date run, there’s no shortage of affordable stocks that also have impressive growth profiles. In the biotech scene, numerous firms can harness a technological edge to improve various aspects of health and medicine. From genetic medicine to less-invasive disease diagnostics, this piece will check out three Strong-Buy-rated stocks—ZTS, EXAS, and AZN—that I view as among the most investable in the often-choppy biopharmaceutical scene.
Though individual biotech and biopharmaceutical stocks may have a reputation of hitting or missing (either a drug in the pipeline passes late-stage clinical trials or it doesn’t), I think the following well-run companies have distinct advantages in their corner of the biopharma scene that can help smooth out the bumps that are to be expected in investing in biotechnology innovators.
Therefore, let’s check in with TipRanks’ Comparison Tool below to weigh in on three amazing (but not too expensive) biotech plays that currently have the hearts of many Wall Street analysts.
Zoetis (NASDAQ:ZTS)
With many innovative biotechnology companies investing aggressively to yield the next big blockbuster treatment or pill, there’s a lot on the line as firms race to score that first patent. In such a winner-takes-most type of arena, shares of any fast-running biotech are bound to be hit with choppy waters as clinical trial updates hit the headlines. That said, when it comes to pet and livestock health, competition may not be quite as ferocious. Indeed, Zoetis is a rare breed. It’s a large-cap U.S. pet care pure-play.
Of course, ZTS stock can still be subject to wild swings if a promising pipeline treatment fails trials. But as a market leader with an expansive pipeline and some of the best pet-care talent in the world, the firm’s steady market positioning is enough reason to stick with the name through the ups and downs. At this juncture, I share analysts’ bullishness as the firm looks to continue building out its pipeline while continuing to cash in on its new smash hits.
Indeed, Zoetis is a top dog with an impressive track record of yielding very successful new product launches. Of late, osteoarthritis (OA) drugs, like Librela and Solensia for canines and felines, respectively, have been impressive growth drivers for the firm. In the latest quarter, such OA drugs played a large role in propelling 13% in international sales growth in the companion animal products segment.
Undoubtedly, dogs and cats are like members of the family in many households. Whenever there’s a treatment out there to take away the pains of osteoarthritis, you can bet that many pet owners will be more than willing to pay for the medication as they would if they were treating their own ailments.
At 32.6 times forward price-to-earnings, ZTS is far cheaper than the specialty & generic drug manufacturers’ industry average of 41.3 times.
What Is the Price Target for ZTS Stock?
ZTS stock is a Strong Buy, according to analysts, with seven unanimous Buys assigned in the past three months. The average ZTS stock price target of $226.14 implies 35.3% upside potential.
Exact Sciences (NASDAQ:EXAS)
Exact Sciences stands out as one of the most intriguing innovators in the corner of cancer diagnostics. Undoubtedly, traditional methods of cancer screening (think colonoscopies for colorectal cancer screening) can be quite invasive and deter many from getting them in the first place. Not to mention, they may rack up costlier bills. As Exact Sciences continues to disrupt the cancer screening market with impressive new innovations, I find it difficult not to be bullish.
Undoubtedly, if the firm weren’t such an innovative disruptor, it probably wouldn’t have a spot in more than one of Cathie Wood’s ARK Invest funds. The firm’s flagship Cologuard product hit record delivery numbers last year, helping the firm clock in more than four million in tests. Moving ahead, I expect such numbers could stay hot as more people become aware of the less-invasive screener via the firm’s marketing campaign.
In late March, EXAS stock rose as promising data for its esophagus test Oncoguard was disclosed to the public. As the firm continues betting big on new tests, it’ll likely be just a matter of time before the stock, which is still down 53% from its high, lifts itself off the tarmac. Exact may not be a huge firm, with its $13 billion market cap, but it’s a leader in cancer screening and diagnostics, and it’s looking to build on that lead as it keeps its foot on the R&D gas.
What Is the Price Target for EXAS Stock?
EXAS stock is a Strong Buy, according to analysts, with 14 unanimous Buys assigned in the past three months. The average EXAS stock price target of $92.17 implies 24.1% upside potential.
AstraZeneca (NASDAQ:AZN)
AstraZeneca stock has been flat for around two years now, and shares are down just over 10% from their peak. With COVID-19 vaccine sales plunging, the firm could certainly use a hit new product to help keep growth going strong. Despite falling demand for the COVID-19 business, AstraZeneca still managed to eke out 6% sales growth in 2023. With a robust oncology and rare disease treatment pipeline, I think analysts are right to stay bullish on the firm as the stock itself takes a bit of a lengthy breather.
Specifically, the firm’s oncology pipeline shows great promise. Just last week, it gained approval for Enhertu to be used in a particular first-of-its-kind type of therapy. And earlier this year, the firm got the green light for Tagrisso, a product to be used in conjunction with chemotherapy for specific forms of lung cancer.
At just 16 times forward price-to-earnings, AZN stock certainly stands out as the cheapest play of this trio.
What Is the Price Target for AZN Stock?
AZN stock is a Strong Buy, according to analysts, with six Buys and two Holds assigned in the past three months. The average AZN stock price target of $81.95 implies 19.8% upside potential.
The Takeaway
These three firms have some pretty enticing (and unique) innovations under the hood that may just be able to power the type of growth that we, as investors, crave. Of the trio, analysts seem to see the most upside from ZTS stock in the coming year.
