The healthcare industry has seen a massive influx of investment, innovation, and new entrants over the past two years. Furthermore, $44 billion was raised in health innovation globally last year, which is twice as much as 2020, while the acquisition of health and health tech companies grew 50%. In addition, healthcare spending in the United States is ballooning, with national healthcare expenditure projected to grow at an average annual rate of 5.4% to $6.20 trillion by 2028.
This year is expected to be a transformative one for global health, with digitally enabled care as the center of the transformation. The global digital health Market size is expected to reach $430.52 billion by 2028, achieving a 16.9% CAGR. Also, near-inelastic demand for healthcare and continuing disruptions in the healthcare industry related to technology and medical breakthroughs should drive growth.
Given this backdrop, we think healthcare stocks AbbVie Inc. (ABBV), Sanofi (SNY), and AmerisourceBergen Corporation (ABC), which have had a solid run lately, could continue climbing in price. So, these stocks could be ideal bets for this year.
Click here to checkout our Healthcare Sector Report for 2022
AbbVie Inc. (ABBV)
ABBV in North Chicago, Ill., is a research-based biopharmaceutical company that is engaged in research and development, manufacturing, commercialization, and sale of medicines and therapies. ABBV offers its products in various therapeutic categories, including immunology, oncology, aesthetics, neuroscience, and more.
Today, ABBV announced that Alberta, Saskatchewan, British Columbia, and Manitoba now reimburse VENCLEXTA® (venetoclax) in combination with obinutuzumab to treat adult patients with previously untreated chronic lymphocytic leukemia (CLL), demonstrating the company’s expertise in oncology.
Earlier, ABBV announced an agreement with the pan-Canadian Pharmaceutical Alliance (pCPA) for VENCLEXTA® (venetoclax) in combination with azacitidine for the treatment of patients with newly diagnosed acute myeloid leukemia (AML) who are ineligible for intensive induction chemotherapy. And Quebec, Saskatchewan, and Manitoba are the first provinces to reimburse the combination treatment.
ABBV’s net revenues increased 7.4% year-over-year to $14.89 billion in its fiscal fourth quarter, ended December 31. Its operating earnings rose 35.2% from the prior-year quarter to $5.07 billion. Its net earnings came in at $4.04 billion, indicating a substantial increase from its year-ago value of $36 million. Its adjusted EPS increased 13.4% year-over-year to $3.31.
The Street expects the company’s revenues to be $13.69 billion in its fiscal first quarter, ending March 2022, indicating an increase of 5.9% year-over-year. The company’s EPS is expected to increase 7.5% year-over-year to $3.17. Furthermore, ABBV has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters.
The stock has gained 38.1%in price over the past year and 8.4% year-to-date. ABBV hit its 52-week high of $148.35 in its last trading session and closed at $146.76.
ABBV’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, equating to Strong Buy in our rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
ABBV has a B grade for Value, Sentiment, and Quality. It is ranked #7 among the 179 stocks in the Medical – Pharmaceuticals industry.
In addition to the POWR Ratings grades highlighted, one can see the ABBV’s Growth, Momentum, and Stability ratings here.
Sanofi (SNY)
Headquartered in Paris, France, SNY researches, develops, manufactures, and markets therapeutic solutions in the United States, Europe, and internationally. It operates through three segments: Pharmaceuticals; Vaccines; and Consumer Healthcare.
Yesterday, SNY and GlaxoSmithKline (GSK) announced that they intend to submit data from both their booster and Phase 3 efficacy trials as the basis for regulatory applications for a COVID-19 vaccine. The company pointed to the robust efficacy of the Sanofi-GSK vaccine, and if it receives authorization for commercialization, SNY should garner substantial returns.
Earlier this month, SNY provided positive results from long-term, open-label extension studies that demonstrated that olipudase alfa provides sustained improvement across multiple clinical manifestations of ASMD. “These collective findings demonstrate the promise of olipudase alfa to positively impact the progressive nature of ASMD, providing improvement that was observed early and did not diminish over an extended follow-up period up to 6.5 years,” stated the company’s Global Head of Medical Affairs, Rare Diseases.
SNY’s net sales increased 6.5% year-over-year to €9.99 billion ($11.31 billion) in its fiscal fourth quarter, ended December 2021. Its gross profit rose 10.2% from its year-ago value to €6.94 billion ($7.86 billion). Also, its net income came in at €1.13 billion ($1.28 billion), indicating an increase of 6% year-over-year. The company’s EPS improved 5.9% year-over-year to €0.90.
Analysts expect SNY’s revenues to increase 4.4% year-over-year to $46.58 billion in the current year. The company’s EPS is expected to increase 12.4% year-over-year to $4.36. In addition, SNY has topped the Street’s EPS estimates in each of the trailing four quarters.
Shares of SNY have gained 13.2% in price over the past year and 4.8% year-to-date to close yesterday’s trading session at $52.52. The stock is trading 3.2% below its 52-week high of $54.26.
SNY has an overall B rating, which translates to Buy in our proprietary rating system. It also has a B grade for Value and Stability. It is ranked #27 in the Medical – Pharmaceuticals industry.
To see additional SNY ratings for Growth, Sentiment, Quality, and Momentum, click here.
AmerisourceBergen Corporation (ABC)
ABC sources and distributes pharmaceutical products in the United States and internationally. The Chesterbrook, Pa.-based concern provides services to healthcare providers and pharmaceutical and biotech manufacturers. It also provides pharmacy management, staffing, and other consulting services.
For its fiscal first quarter, ended December 31, ABC’s revenues increased 13.5% year-over-year to $59.63 billion. Its gross profit stood at $2.06 billion, up 41.9% year-over-year. Its non-GAAP net income rose 21% from the prior-year quarter to $545.39 million, while non-GAAP EPS increased 18.3% year-over-year to $2.58.
The $237.43 billion consensus revenue estimate for its fiscal year 2022 indicates an 11% increase year-over-year. The Street expects the company’s EPS to come in at $10.79, reflecting a 16.5% increase year-over-year. Furthermore, it surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past year, the stock has gained 31% in price to close yesterday’s trading session at $139.47. The stock has gained 5% year-to-date. Also, ABC is currently trading just 3.3% below its 52-week high of $144.22, which it hit on February 18.
It’s no surprise ABC has an overall A rating, which equates to Strong Buy in our proprietary POWR Ratings system.
ABC has a B grade for Growth, Value, Stability, and Sentiment. Among the 85 stocks in the Medical - Services industry, it is ranked #5.
Click here to view additional ratings for Momentum and Quality.
Click here to checkout our Healthcare Sector Report for 2022
ABBV shares were trading at $144.98 per share on Thursday morning, down $1.78 (-1.21%). Year-to-date, ABBV has gained 8.19%, versus a -12.55% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
3 Unstoppable Healthcare Stocks to Buy and Hold in 2022 StockNews.com
