Jefferies Top Pharma Stock Picks for 2016

Health and Healthcare

Published: December 7, 2015 4:09 pm

Last Updated: January 13, 2020 4:21 pm

Although most pharmaceutical stocks might trade down in the market Monday afternoon, most investors are looking past just the day and at what these stocks can do in the future. In fact, brokerage firm Jefferies has released its top pharmaceutical picks for the coming year and what to expect.

As we have seen, 2015 was a more challenging year than expected, with the biotech and pharma bubbles bursting, and concerns over political focus on drug pricing combined with macro fears and a broader slowdown in emerging markets brought down the entire biopharmaceuticals sector. However, 2016 has a more positive outlook.

The brokerage firm listed its top picks in descending order: AbbVie Inc. (NYSE: ABBV), Eli Lilly and Co. (NYSE: LLY), Pfizer Inc. (NYSE: PFE), Novartis A.G. (NYSE: NVS), Roche, and Abbott Laboratories (NYSE: ABT).

Jefferies detailed in its report:

AbbVie remains our Top Pick globally as we believe that we will begin to get visibility on legal/ IP blockades on US Humira by mid-2016 as well as continued strong pipeline development and EPS growth. Eli Lilly is moved ahead of Pfizer into 2nd place as the latter digests the Allergan merger process, but also because we believe the strength of Eli Lilly’s mid-term earnings growth is under-appreciated by the market. Novartis is moved to our Top European Pick on being oversold recently as well as into the LEE011 and Relaxin catalysts in the first half of 2016. We believe Roche has the strongest overall and immuno-oncology R&D pipeline in the world and that Aphinity will resolve positively during 2016 and release pent up multiple expansion. We expect Roche to further evidence leadership in immuno-oncology through its mono and combo programs in 2016, with chemo-combo data in NSCLC potentially by the fourth quarter set to displace Bristol-Myers Squibb and Merck.

Shares of AbbVie were last trading down 2% at $56.05, with a consensus analyst price target of $75.21 and a 52-week trading range of $45.45 to $71.60.

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Shares of Eli Lilly were last trading down 0.5% at $86.16, with a consensus analyst price target of $97.53 and a 52-week trading range of $68.31 to $92.85.

Shares of Pfizer were last trading down 0.6% at $32.60, with a consensus analyst price target of $40.47 and a 52-week trading range of $28.47 to $36.46.

Shares of Novartis were last trading down 0.8% at $85.50, with a consensus analyst price target of $107.25 and a 52-week trading range of $84.28 to $106.84.

Shares of Abbott were last trading relatively flat at $45.42, with a consensus analyst price target of $50.97 and a 52-week trading range of $39.00 to $51.74.

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