Pharma stocks and massive potential go hand in hand. With devastating diseases like cancer, diabetes and heart disease still far from finding a cure, drugs that treat these conditions often command exorbitant prices. So, any company that develops a new drug to manage these ailments and obtain federal approval typically sees its stock price skyrocket.
Three pharma stocks are for investors who are considering adding to their portfolios with this kind of potential. I believe that these firms represent the best value for money in the market. What’s best is that they are rarely talked about in the financial media. Therefore, one could potentially tap into an undervalued opportunity as well.
Let’s examine three pharma stocks for investors to buy this spring.
Regeneron Pharmaceuticals (REGN)
Regeneron Pharmaceuticals (NASDAQ:REGN) focuses on discovery, development and commercialization of medicines for various diseases.
Recently, REGN reported its Q4 2023 financial results, showing a modest increase of 1% in total revenue to $3.43 billion compared to Q4 2022. For 2024, Regeneron Pharmaceuticals plans to continue advancing its oncology pipeline. This includes the launch of new drugs such as Linvo. Also, it aims to bring 8 to 10 new molecules into clinical trials and expand its R&D facilities.
Overall, Regeneron projects further progress in 2024, particularly in clinical development and expansion of its product portfolio.
The reason I think that REGN could be a buy comes down to its strong EPS forecast over the next few years. Analysts anticipate high single-digit increases, along with top-line accretion. Despite trading at just 25 times earnings, its stock price of $903 also makes it a potential candidate for a stock split as well.
Vertex Pharmaceuticals (VRTX)
Vertex Pharmaceuticals (NASDAQ:VRTX) specializes in the development of therapies for cystic fibrosis and other serious diseases.
The brand reported its Q4 2023 earnings, with total revenue increasing by 8% to $1.57 billion in the U.S. and 12% to $943 million internationally compared to Q4 2022.
For product developments, Vertex Pharmaceuticals continues to advance its pipeline, including its triple therapy for cystic fibrosis. The treatment has shown positive data and is expected to lead to regulatory filings in 2024. Also, the company reports progress on its CASGEVY treatment for sickle cell disease and beta-thalassemia, which received Food and Drug Administration (FDA) approval.
Looking ahead, Vertex Pharmaceuticals is preparing for several potential new product launches, including inaxaplin for kidney disease and further gene therapy developments. Despite these, analysts forecast a 11.5% annual earnings growth.
Moderna (MRNA)
Moderna (NASDAQ:MRNA) is famously known for its mRNA-based vaccines, including its Covid-19 vaccine.
However, MRNA reported a revenue decrease in 2023 compared to 2022, primarily due to reduced sales of its Covid-19 vaccine. Despite this, the company continues to advance its mRNA-based therapeutic pipeline.
One of the key reasons I believe that MRNA is an overlooked opportunity in the market is evidenced by its P/S ratio of just 6 times sales.
For 2024, Moderna anticipates regulatory approvals for its RSV and flu vaccines, with the flu vaccine achieving strong performance in trials. Also, Moderna aims to initiate clinical studies for new therapeutic targets, including in oncology. Additionally, the company is planning for several near-term product launches, such as its CMV vaccine.
Financial guidance for 2024 shows an expected recovery in Moderna’s sales and a projected growth trajectory, particularly with its resized manufacturing capacity and streamlined operations.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
