The 3 Most Undervalued Pharma Stocks to Buy in July 2024

Industry Overview - Pharmaceutical stocks are considered resilient investments due to the inelastic demand for medications and healthcare services, which remain stable regardless of economic conditions [1] - The U.S. economy is showing signs of slowing, with GDP growth at 1.4% year-over-year in Q1 2024, making it a favorable time to invest in undervalued pharma stocks [11] Novo Nordisk A/S (NVO) - Novo Nordisk is a Danish pharmaceutical company focused on diabetes and obesity care, as well as rare diseases, with significant media attention on its weight-loss drugs, Ozempic and Wegovy [3] - The company has generated billions in sales from its new drugs, with Goldman Sachs predicting the weight-loss drug market will reach $100 billion by 2030 [12] - NVO shares have increased by 80.4% over the past year, trading at 39.6x forward earnings, indicating strong potential for further growth [12] Novartis (NVS) - Novartis is a Swiss pharmaceutical company that develops drugs in therapeutic areas such as cardiovascular, immunology, and oncology, with Entresto being one of its most lucrative products [5][16] - In 2023, Novartis generated over $6 billion from Entresto, a 30% year-over-year increase, and $4.9 billion from Cosentyx, which treats moderate to severe hidradenitis suppurativa [16] - NVS shares trade at 14.2x forward earnings, making them relatively cheaper compared to other innovative companies in the U.S. stock market [17] GSK (GSK) - GSK is a British pharmaceutical company specializing in vaccines and general medicines, with a focus on respiratory, oncology, and infectious diseases [8] - Under CEO Emma Walmsley's leadership since 2017, GSK has shifted its strategy towards vaccines and cancer, moving away from its previous focus on HIV [18] - GSK generated $9.1 billion in Q1 revenue, driven by respiratory vaccines and specialty HIV products, and plans to launch 12 new pharma products by 2025 [18]