Do You Have These Pharmaceutical Stocks On Your May 2022 Watchlist?
With the U.S. economy slowing down in the first quarter of the year, fears of a possible recession start to arise. Specifically, GDP declined by 1.4% over the quarter, the first time it has contracted since the onslaught of the pandemic. Additionally, with the ongoing headwinds in the market such as inflationary pressures and uncertainty over the war in Ukraine, investors could be looking into safer sectors of the stock market. As such, pharmaceutical stocks could make for a viable play right now. Pharmaceutical stocks are part of the health care industry. And given the fact that health care is a necessity, demand for health care products and services will always remain regardless of the economy.
Take Pfizer (NYSE: PFE) for instance. Just this past week, the company said that it will be opening the first U.S. trial site for its experimental gene therapy for a muscle-wasting disorder. This comes after the FDA lifted its hold on a late-stage study. Elsewhere, Moderna (NASDAQ: MRNA) recently requested the FDA to authorize its Covid-19 vaccine in children aged 6 months to under 6 years. This is based on its data that the vaccine-induced a strong neutralizing antibody response in the age group. Given the developments in the pharmaceutical industry, here are four top pharmaceutical stocks to watch in the stock market today.
Pharmaceutical Stocks To Buy [Or Avoid] In May 2022
- Merck & Co. Inc. (NYSE: MRK)
- Eli Lilly & Company (NYSE: LLY)
- Gilead Sciences Inc. (NASDAQ: GILD)
- BioNTech SE (NASDAQ: BNTX)
Kicking off our list, we have Merck, a multinational pharmaceutical company. It has been a leader in the industry for over 130 years and has brought many life-saving medicines and vaccines to millions of people. It also continues to be at the forefront of research to prevent and treat diseases that threaten both people and animals. This would include cancer, infectious diseases, and emerging animal diseases. Over the past year, MRK stock has risen by over 25%. On Thursday, Merck reported its first-quarter financials that soundly beat consensus estimates on profit and revenue.
The company brought in a revenue of $15.9 billion for the quarter, rising a whopping 50% from last year and beating estimates of $14.68 billion. The company thanks to its Covid-19 treatment, molnupiravir, which made up 20% of the company’s first-quarter revenue. Looking at its profits, Merck raked in a net income of $4.31 billion, a 57% rise from $2.7 billion in 2021. Accordingly, earnings per share were $2.14, an 84% year-over-year increase that beats the $1.83 per share analysts were expecting. Looking ahead, Merck raised its 2022 earnings guidance to between $7.24 and $7.36 per share on $56.9 billion to $58.1 billion in revenue. Considering the impressive quarter, should you buy MRK stock?
Eli Lilly and Company
Another top pharmaceutical stock to watch is Eli Lilly and Company (LLY). It is a leading pharmaceutical firm that has operations that span across the globe. For a sense of scale, the company has offices in 18 countries while its products are sold in approximately 125 countries. In brief, the company’s portfolio includes treatments for various diseases including diabetes, cancer, endocrine-related illnesses, and Covid-19 to name a few. In the past year, LLY stock has seen gains of over 60%.
Yesterday, the pharmaceutical company posted quarterly earnings that topped estimates. For starters, revenue was up by 15% to $7.81 billion, largely driven by volume growth of 20%. As for its profits, LLY reported a net income of $2.37 billion, a massive 62% increase from $1.47 billion last year. Earnings per share were $2.62, up from $1.61 in the prior year. Besides that, the company also made a notable announcement regarding its potential blockbuster obesity drug, tirzepatide. Notably, the drug is able to help patients lose more than 20% of weight in a late-stage clinical trial. Not to mention, tirzepatide is also being studied as a treatment for type 2 diabetes. All things considered, should you add LLY stock to your portfolio?
Next up, we have Gilead Sciences. In brief, it is a biopharmaceutical company that focuses on researching and developing antiviral drugs. The likes of which serve to treat hepatitis B, hepatitis C, and influenza. Moreover, Gilead is also a leader in developing HIV drugs such as Truvada and Genvoya. In addition to the aforementioned drugs, its strong portfolio includes breast cancer drugs and a coronavirus treatment, remdesivir. After yesterday’s closing bell, the company announced the results for the first quarter of 2022.
Jumping in, revenue was up by 3% to $6.59 billion. This increase in revenue is attributed to the increased demand for its Biktarvy and Veklury drugs. Revenue for Biktarby rose by 18% year-over-year to $2.15 billion. On the other hand, its Covid-19 drug, Veklury, rose 5% year-over-year to $1.54 billion. Moving on, non-GAAP diluted earnings increased by 4% from $2.04 per share to $2.12 per share. As for its full-year outlook, Gilead expects total product sales to range between $23.8 billion and $24.3 billion. And non-GAAP earnings per share are expected to be between $6.20 and $6.70. All in all, given the strong quarter at Gilead, should you invest in GILD stock?
BioNTech is a biopharmaceutical company that has pioneered novel therapies for cancer and other serious diseases. Accordingly, the company exploits a wide array of computational discovery and therapeutic drug platforms for the rapid development of novel biopharmaceuticals. Thanks to its deep expertise in mRNA vaccine development and its in-house manufacturing capabilities, the company created one of the first mRNA vaccines in the world to treat Covid-19. On March 30, the company reported its fourth-quarter and full-year financials.
Diving in, revenues for the quarter grew by over 1,000% year-over-year to $6.16 billion on strong vaccine sales. In fact, BioNTech has sold over 2.6 billion doses of its vaccine to more than 165 countries and regions worldwide in 2021. This also includes more than 1 billion doses to low- and middle-income countries. It has also signed orders for 2022 delivery of up to 2.4 billion vaccine doses. Besides, net profit for the quarter rose by over 700% to $3.53 billion. Also, BioNTech announced that its global Covid-19 supply chain and manufacturing network now includes 20 manufacturing facilities that span across four continents. With that in mind, should investors be on the lookout for BNTX stock?