The health care sector has been a big winner in 2020, far outpacing the Dow Jones industrial average and S&P 500. The pandemic definitely has played into these stocks running, but with the valuations of many of these companies tied to clinical trials and pipelines, the industry is more defensive to a degree. However, one big-name analyst thinks a few of these names could go on the offensive for the rest of the year.
The research team at Goldman Sachs publishes many Buy and Sell ratings, but the most prized companies are generally referred to as Conviction Buy List stocks. These are the firm’s top ideas, and they are generally mid-cap to large-cap companies. Goldman Sachs actually has seven biopharma stocks on its Conviction Buy list, and these are not all coronavirus plays.
It’s worth noting here that investors should not base their decisions to buy or sell solely on a single analyst call. Other analysts and firms are weighing in on these stocks with other insights that may align or disagree. Either way, this is how we come to a consensus, or at least for the target.
24/7 Wall St. has provided some color on each call, and we have compared the Goldman Sachs targets to the Refinitiv consensus analyst target prices to show whether there is really any stronger conviction than the average analyst expectations for the stock.
Amgen Inc. (NASDAQ: AMGN) is one of the biggest names in biotech, and Goldman Sachs has a $290 price target on its shares, implying upside of 15% from the most recent closing price. Amgen stock was last seen at $247.76, with a 52-week range of $173.12 to $264.97. The consensus price target is $258.21.
BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) is the smallest name on this list, but it has made itself known more so recently with its portfolio of treatments for metabolic disorders. Goldman Sachs has a $165 price target, implying an upside of 33% from the most recent closing price. BioMarin stock was trading at $122.66. It has a consensus price target of $126.71 and a 52-week range of $62.88 to $131.95.
Eli Lilly and Co. (NYSE: LLY) has a portfolio that spans cancer, diabetes, immunology and more. It consistently has been a top pharma pick on the street, and with a coronavirus antibody treatment, this is a no-brainer. The stock is actually up about 23% year to date, leaving the broad markets in the dust. Goldman Sachs has a Conviction Buy rating and a $186 price target, implying upside of 15.5%. Eli Lilly stock was trading at $160.08, in a 52-week range of $101.36 to $170.75. Analysts have a consensus price target of $162.93.
Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) has been on everyone’s radar as a frontrunner for a coronavirus treatment. Its partnership with Sanofi is promising, and with the stars aligning with FDA approvals, this stock could continue to outperform this year, after already gaining 68%. Goldman Sachs has a $720 price target for the stock, implying upside of about 14%. Regeneron stock was trading around $604.26, in a 52-week range of $271.37 to $664.64. The consensus price target is $643.83.
Seattle Genetics Inc. (NASDAQ: SGEN) is simply a cancer play. The company has partnerships with multiple companies across even more trials. Hodgkin lymphoma, metastatic HER2+ breast cancer and recurrent cervical cancer are just a few of its trials that are in the works. Goldman Sachs has a $251 price target, implying upside of 46% from the most recent closing price. Seattle Genetics stock traded at $169.23, in a 52-week range of $65.44 to $187.99. Analysts have a consensus price target of $167.53.
Vertex Pharmaceuticals Inc. (NASDAQ: VRTX) is another big pharma play that has a bevy of treatments for the big diseases out there. Cystic fibrosis, Duchenne muscular dystrophy, sickle cell disease and type 1 diabetes treatments are a few of the candidates in the current pipeline. Goldman Sachs has a Conviction Buy rating and a $330 price target, implying upside of 16% from the most recent close. Vertex stock was trading at $279.22. It has a consensus price target of $295.91 and a 52-week trading range of $165.23 to $306.08.
Zoetis Inc. (NYSE: ZTS) is an interesting name to make the list. This is the largest global animal health company. Whether customers are looking for help with livestock, horses or even their own pets, Zoetis offers solutions across these fields. Goldman Sachs has a $155 price target, implying upside of about 8%. Zoetis stock was trading at $143.14. It has a 52-week range of $90.14 to $147.09, and the consensus price target is $140.08.