From drugstores to biotech companies, the entire healthcare sector has strived to fight the COVID-19 public health crisis. Government policy support for this industry has helped shares of many healthcare companies deliver significant returns. The Vanguard Health Care Index Fund ETFs (VHT) 18% returns over the past six months is reflective of investors’ interest in the healthcare space.
Along with continuing efforts to find a cure for COVID-19, most pharmaceutical companies have been continuing their R&D projects and clinical trials for the treatment of other critical diseases. The global pharmaceuticals market is expected to grow at a 7% CAGR over the next seven years to reach $2.15 trillion by 2027.
AbbVie Inc. (ABBV), Novo Nordisk A/S (NVO), and Bristol-Myers Squibb Company (BMY) have recently hit their 52-week stock price highs thanks to their impressive R&D projects and viable drug portfolios. As such, we think these stocks are solid additions to one’s portfolio now.
Click here to checkout our Healthcare Sector Report for 2021
AbbVie Inc. (ABBV)
ABBV develops, manufactures and sells a range of pharmaceutical products. The company’s products are focused on treating diseases related to immunology, oncology, virology, neuroscience, eye care, women’s health, gastroenterology and other serious health conditions.
This week, The Lancet medical journal published primary analysis results of ABBV’s RINVOQ from the pivotal global Phase 3 clinical trials. These successful trials evaluated RINVOQ’s effects in treating adults and adolescents with moderate to severe atopic dermatitis.
On May 10, ABBV company Allergan Aesthetics, and Soliton (SOLY) announced an agreement to acquire Soliton and RESONIC, its Rapid Acoustic Pulse device that helps with the short-term improvement in appearance of cellulite. The acquisition expands Allergan Aesthetics' body contouring treatment portfolio and improves patient satisfaction.
During its fiscal year 2021 first quarter, ended March 31, 2021, ABBV’s net revenue increased 50.9% year-over-year to $13.01 billion. The company’s operating earnings came in at $4.10 billion, which represents a 13.9% gain from the prior-year period. While its non-GAAP net income increased 45.8% year-over-year to $5.27 billion, its non-GAAP EPS increased 21.9% year-over-year to $2.95.
A $3.08 consensus EPS estimate for the current quarter, ending June 30, 2021, represents a 31.6% year-over-year improvement. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The $13.60 billion consensus revenue estimate for the current quarter, represents a 34.9% rise from the prior-year period. The stock’s EPS is expected to grow 4.2% per annum over the next five years. ABBV climbed 11.5% over the past six months to close yesterday’s trading session at $115.91. The stock hit its 52-week high of $118.28 on May 21.
ABBV’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has a B grade for Growth, Quality and Value also. In addition to the POWR Ratings grades we’ve just highlighted, one can see ABBV’s ratings for Momentum, Stability and Sentiment here. ABBV is ranked #11 of 230 stocks in the Medical - Pharmaceuticals industry.
Novo Nordisk A/S (NVO)
NVO is a Denmark-based company that discovers, develops, manufactures, and markets pharmaceutical products worldwide. The company focuses on diabetes care and offers insulin delivery systems and other diabetes products.
On May 21, 2021, NVO established a Euro Medium Term Note (EMTN) program for the issuance of €5 billion ($3.88 billion) of senior unsecured notes. The net proceeds will be used for NVO’s general corporate purposes, including refinancing of a bridge loan facility established with NVO’s acquisition of Emisphere Technologies Inc. in 2020.
On May 17, NVO announced the results of RESCUE, a phase 2 clinical trial of NVO’s ziltivekimab effects on biomarkers of inflammation, in The Lancet journal. The trial showed a significant reduction of multiple inflammatory biomarkers associated with atherosclerosis in people with advanced chronic kidney disease (CKD) and elevated high-sensitivity C-reactive protein (hsCRP). The company hopes to progress in its phase 3 trial.
For its fiscal year 2021 first quarter, ended April 3, 2021, NVO’s net sales came in at DKK18.75 billion ($3.09 billion), which represented a 5.2% sequential improvement. The company’s gross profit increased 5.6% sequentially to DKK27.99 billion ($4.61 billion). Its operating profit is reported at DKK14.98 billion ($2.47 billion) for the quarter, up more than 34% from the fourth quarter of 2020. NVO’s net profit increased 35.5% sequentially to DKK12.62 billion ($2.08 billion). Its EPS came in at DKK5.45, up 35.9% from the prior quarter.
Analysts expect NVO’s EPS to improve 9.7% year-over-year for the current quarter, ending June 30, 2021 to $0.79. And its $5.29 billion consensus revenue estimate for the current quarter represents an 11% rise on a year-over-year basis. Analysts expect the stock’s EPS to grow at 1.4% per annum over the next five years. NVO has gained 23.9% over the past six months and closed yesterday’s trading session at $81.70. The stock hit its 52-week high of $82.23 on May 24.
It’s no surprise that NVO has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock has an A grade for Quality, and a B grade for Value and Stability. To see additional POWR Ratings for NVO’s Growth, Sentiment and Momentum, click here. NVO’s is ranked #6 in the Medical - Pharmaceuticals industry.
Bristol-Myers Squibb Company (BMY)
BMY discovers, develops, licenses, manufactures, and markets bio-pharmaceutical products worldwide. The company offers products in hematology, oncology, cardiovascular, and immunology therapeutic classes, and sells products to wholesalers, distributors, pharmacies, retailers, hospitals, clinics, and government agencies.
Today, BMY entered a technology license agreement with Xencor, Inc. (XNCR), a clinical-stage biopharmaceutical company, to access XNCR’s Xtend XmAb technology in SARS-CoV-2 virus neutralizing monoclonal antibody combination for COVID-19 treatment. The SARS-CoV-2 mAb Duo was discovered by researchers at The Rockefeller University and was subsequently licensed by BMY. The company hopes XNCR’s Xtend technology will help in the success of its clinical trials and beyond.
On May 21, The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended approval of BMY’s Opdivo-Yervoy combo for the treatment of adult patients with mismatch repair deficient or microsatellite instability-high metastatic colorectal cancer (mCRC) after prior chemotherapy. BMY is now looking forward to receiving approval from the European Commission for the first authorization for a dual immunotherapy in colorectal cancer in European Union.
For the fiscal year 2021 first quarter, ended March 31, 2021, BMY’s total revenues came in at $11.07 billion, which represented a 2.7% improvement year-over-year. The company’s non-GAAP gross profit increased 1.1% year-over-year to $8.65 billion. Its adjusted net income came in at $3.95 billion for the quarter. And its non-GAAP EPS increased 1.2% year-over-year to $1.74.
Analysts expect BMY’s EPS for the current quarter, ending June 30, 2021, to be $1.91, up 17.2% year-over-year. It surpassed the Street’s EPS estimates in three of the trailing four quarters. For the current quarter, analysts expect BMY’s revenue to be $11.35 billion, representing a 12.1% rise from the prior-year period. BMY has gained 7.5% over the past three months and closed yesterday’s trading session at $67.29. The stock hit its 52-week high of $67.96 on May 24.
BMY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
The stock has an A grade for Value and a B grade for Growth and Quality. We have also graded BMY for Stability, Sentiment and Momentum. Click here to access all BMY’s ratings. BMY is ranked #9 in the same industry.
Click here to checkout our Healthcare Sector Report for 2021
ABBV shares were trading at $114.61 per share on Tuesday afternoon, down $1.30 (-1.12%). Year-to-date, ABBV has gained 9.53%, versus a 12.24% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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