Health and Healthcare
6 Biotech and Pharma Stocks Analysts Want You to Buy Now
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The end of 2015 and the start of 2016 have been hard on biotech, and in some cases have been hard for Big Pharma. It turns out that there is not just one smoking gun, but the bears now seem to have ample power over cowering bulls. For starters, investors in 2016 are now value conscious and are selling rallies rather than buying dips. It is also an election year, and drug pricing policies are in the hot seat as Republicans and Democrats alike seem eager to go after drug companies and how they price their new drugs. Even the pricing of existing drugs is on the table.
All this makes for volatile times. If a drug company or biotech company doesn’t have a dividend and a stock buyback plan, analysts and investors seem to only be willing to pay lower multiples for earnings valuations. After all, having no revenues now and being valued at 40 to 60 times expected 2021 earnings is understandably a harder sell now that biotechs are not endlessly rallying.
24/7 Wall St. has had its eyes out for a while now on the biotech and pharmaceutical sector for potential bottoming out. The first thing readers need to consider is that calling a true bottom at any given time has proven over and over to be a cross between a fool’s errand and a sucker’s game. That being said, there is no reason to say that a bottom has been seen this week, this month or ever. Still, long-term investors try to look beyond the noise of today for opportunities in the months or longer ahead.
It turns out that analysts have started getting much more realistic on how high certain pharma and biotech stocks should be valued. Many of these are down massively from their highs. The biotech ETF (XBI) is now down about 50% from its 2015 peak and has fallen under a key upside support line from 2014. Some key analyst calls have been made in the biotech and pharmaceutical sectors over the past week or so. These need to be considered long-term picks, and it cannot be stressed enough that if the market keeps drifting lower that these would seemingly follow suit.
Last week there were four top biopharma movers too big to be ignored. Here are six biotech and pharma stocks that analysts are telling their firm’s clients to buy now for solid upside opportunities ahead. As you will see, there are even some lowered price targets here that still offer large potential upside for long-term value investors.
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