It's clear that healthcare stocks are dynamite right now on Wall Street.
Here are some top names to trade on the momentum swing.
Pfizer (PFE) is not only the largest drug maker in the U.S., but likewise has carved a reputation as a global pharma giant. We can see that over the last five years, Pfizer's stock has shot up from $23.51 to $41.50. Yet, 2018 has proved to be one of rapid-fire momentum. Just this year alone, shares have shot up 17%.
The biotech giant has unleashed a slew of blockbuster drugs - neuropathic pain and fibromyalgia drug Lyrica, antibiotic Zithromax, E.D. drug Viagra, to name a few. Yet, Pfizer is not a giant of the past. Consider Pfizer's heart drug Tafamidis, another potential blockbuster drug that could shake up the market.
Pfizer forecasts a number as high as 500,000 patients around the globe suffering from transthyretin cardiomyopathy. Yet, with under 1% of that pool diagnosed, Pfizer could offer relief for the rare condition. This could be a huge opportunity for Pfizer as there are no approved treatments for the under-diagnosed condition.
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In a recent Phase 3 study, the drug dialed down risk of death in patients with the rare heart disease by an impressive 30%. More than that, Pfizer also lessened the risk of cardiovascular-related hospitalizations by 32%.
Weill Cornell Medicine and New York-Presbyterian's director of the advanced heart failure fellowship program Irina Sobol was not involved in the trial; and yet, she stands upbeat on the transformative prospects ahead.
"It's very, very exciting," cheers Sobol, adding: "I fully expect it would change the standard of care. It will make physicians be more excited, it will lead us all to look for patients with this disease because now there are clear paradigms for treatment."
BMO analyst Alex Arfaei echoes the bullish fever circling Tafamidis, noting that "data seems good" and "supports our $1bn+ forecast."
As such, the analyst reiterates an Outperform rating on Pfizer's stock and calls for the stock to run up to $44.
"We believe ~30% reduction in the risk of mortality and CV-related hospitalization with Tafamidis is clinically meaningful. Tafamidis showed consistent directional mortality benefit across almost all sub-groups. There could be some pushback on subgroup data, but it shouldn't be a deal breaker. Diagnosis rate should improve over time, and Pfizer should gain majority share given commercial strength in cardiology," writes Arfaei.
Arfaei's prediction: a U.S. price of $250,000 per year for the "underappreciated" blockbuster contender. By 2027, the analyst anticipates this drug will be turning over $1.3 billion.
Ultimately, the 'Moderate Buy' stock has attracted two bulls over the last three months and has four analysts playing it cautiously optimistic on the sidelines. That said, the 12-month average price target of $48.80 indicates confidence, reflecting almost 18% in upside potential.
Global Blood Therapeutics
Small-cap Global Blood Therapeutics (GBT) is a biotech player to watch. With just a $2.5 billion market cap, shares have been burning up in 2018 on a close to 19% upturn. Year-over-year growth also looks feverish, with the stock up nearly 76%.
Last Thursday, Global Blood revealed a new global in-licensing deal with Swiss biotech giant Roche (RHHBY) for rights to inclacumab. Global Blood has its eyes on developing the drug as a treatment for vaso-occlusive crises (VOC) in patients with sickle cell disease (SCD), which further bolsters GBT's SCD pipeline.
In reaction, Oppenheimer analyst Mark Breidenbach praises the deal: "In our view, inclacumab could help fill a clinical benefit gap for patients receiving voxelotor, Global Blood's lead product."
The analyst reiterates an Outperform rating on the stock fresh on the heels of the agreement with a $74 price target. In other words, Breidenbach bets on 50% upside potential still in store for the shares.
Worthy of note, Breidenbach first initiated coverage on Global Blood Therapeutics back in November 2016, and has stayed a steadfast bull ever since.
It's certainly paid off for the analyst. Breidenbach exhibits a track record of 80% success on his GBT recommendations. This translates to 43.3% in average profits.
In a nutshell, "We see inclacumab as a complementary and logical addition to Global Blood's pipeline," contends the analyst.
Wall Street loves this 'Strong Buy' opportunity in biotech. All five best-performing analysts polled in the last three months rate a Buy on the stock. Consensus expectations also paint a bullish story here. The consensus price target stands tall at $80.50, marking nearly 63% in upside potential on tap for Global Blood.
Edward Lifesciences (EW) is celebrating '60 years of discovery' this year. In those 60 years, Edward has landed a $30.1 billion market cap and the stock has seen a healthy over 28% rise in year-over-year gains.
Notably, Edward just won a price target from one of Wall Street's top analysts. Canaccord analyst Jason Mills bats for the bulls on Edward Lifesciences, and is ranked #24 out of over 4,800 analysts we track on TipRanks.
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In his most recent research note, Mills said to put it bluntly: "Buy EW aggressively here." When Edward bore the brunt of a pullback after posting quarterly earnings, Mills stood unfazed. Transcatheter aortic valve replacement (TAVR) growth has odds to fire up over the next two quarters - and "maybe 4-6."
The reason we are adamant about adding to positions in EW owes to our belief that the firm will deliver accelerating growth in underlying Transcatheter Valve Therapy (TVT) revenue over at least the next 2 quarters, and quite possibly the next 4 to 6, given myriad catalysts (new products, CAP trial, low risk data and indication expansion through H2:19)."
Confidently, the analyst reiterated a Buy rating on the stock while boosting the price target from $174 to $177 (23% upside potential).
Bottom line, the 'Strong Buy' stock has received six bullish recommendations from best-performing analysts in three months. With 11% in return potential ahead, consensus expectations point to this stock rallying up to $159.86.