Healthcare stocks are considered to be a defensive play at times of economic uncertainty. This is evident in the 4.4% yearly gain of the S&P 500 Health Care Index in comparison to the 16.1% decline of the broader S&P 500 index (SPX). At this juncture, TipRanks’ Top Smart Score Stocks tool can be used to identify healthcare stocks that have a greater chance to outperform the market.
Pfizer (NYSE:PFE) and Eli Lilly (NYSE:LLY) are two such stocks that recently landed a “Perfect 10” Smart Score. Interestingly, the stocks with the Perfect Score have historically surpassed the returns of the benchmark index.
Now, let’s take a closer look at these two stocks.
Pfizer’s entry into the “Perfect 10” category can be justified by its outstanding Q3 results and efforts to expand the company’s product portfolio as sales of the COVID-19 vaccine have been declining.
Remarkably, Pfizer expects to launch 19 products over the next 18 months. Of these new products, Pfizer anticipates that 15 will generate about $20 billion in sales in 2030. During the last earnings call, the company gave optimistic comments on its future top-line performance and raised the lower end of its FY22 revenue outlook.
Recently, Credit Suisse analyst Trung Huynh maintained a Buy rating on the stock with a price target of $55, which implies 9.5% upside potential from current levels.
Should You Buy PFE Stock?
Pfizer stock has a Moderate Buy consensus rating based on five Buy and seven Hold recommendations. Further, the average price target of $52 implies 3.5% upside potential.
Besides analysts, insiders have maintained a positive outlook on PFE stock. Our data shows that insiders bought PFE stock worth $9 million in the last three months. Bloggers are bullish on the stock as well.
The company plans to double its manufacturing capacity by the end of 2023 due to the high demand for its diabetes medications. Also, the possibility of Eli Lilly’s Alzheimer’s drug. donanemab. bringing a breakthrough in the treatment of the disease is another positive factor. LLY recently landed in the “Perfect 10” zone.
Guggenheim analyst Seamus Fernandez reiterated a Buy rating on LLY but raised the price target to $401 from $399. The new price target implies 7.8% upside potential.
Is LLY a Buy or Sell Stock?
Eli Lilly has a Strong Buy consensus rating based on 13 Buys and two Holds. The average price target of $387.93 implies 4.29% upside potential. The stock has rallied 54.3% over the past year.
LLY stock also has positive signals from retail investors and bloggers. Furthermore, its beta of 0.49 makes it a considerably safe stock in these volatile times.