In 2018, stock markets, especially in the pharmaceutical sector, have seen heightened volatility. While the S&P 500 has recovered a bit from its fluctuation this year and has fallen only 0.12% year-to-date, the iShares US Pharmaceuticals ETF (IHE), SPDR S&P Pharmaceuticals ETF (XPH), VanEck Vectors Pharmaceutical ETF (PPH), and First Trust NASDAQ Pharmaceuticals ETF (FTXH) have fallen 4.4%, 5.9%, 3.5%, and 2.5%, respectively, indicating that pharma stocks are underperforming the overall market.
Factors in focus
With an increased focus on cost savings, drug pricing, and market competition, lower tax to boost companies’ research and development programs, and a slew of mergers and acquisitions, the pharmaceutical sector offers several opportunities. Lower stock prices offer an opportunity for contrarian bets that could pay off in the long term for patient investors.
In this series, we’ll explore key pharma names that offer good return potential. We’ll explore their recent market performance, valuation, analysts’ recommendations, and forecasts that savvy investors may be interested in. In each article, we’ll compare two stocks and their key metrics. The stocks we’ll look at are:
- Pfizer (PFE) and Merck (MRK)
- Bristol-Myers Squibb (BMY) and Eli Lilly (LLY)
- Novartis (NVS) and Novo Nordisk (NVO)
- Sanofi (SNY) and GlaxoSmithKline (GSK)
In the next part of this series, we’ll compare Pfizer and Merck.