Health care stocks lagged behind the S&P 500 in 2023, but they can often be a solid defensive play in an uncertain economy. People don’t typically reduce their prescription drug purchases or put off procedures or trips to the doctor just because the economy slumps. The Centers for Medicare and Medicaid Services estimates U.S. health care spending totaled $4.4 trillion in 2022 and projects it will grow 5.4% annually through 2031, providing excellent long-term investment opportunities.
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Here are 10 of the best health care stocks to buy in 2024, according to CFRA analysts:
| Stock | Implied upside over March 25 closing price |
| Eli Lilly & Co. (ticker: LLY) | 14.4% |
| Merck & Co. Inc. (MRK) | 9.3% |
| Abbott Laboratories (ABT) | 14.5% |
| AbbVie Inc. (ABBV) | 11.5% |
| Danaher Corp. (DHR) | 12.6% |
| Amgen Inc. (AMGN) | 25.3% |
| Medtronic PLC (MDT) | 17.7% |
| Vertex Pharmaceuticals Inc. (VRTX) | 16.3% |
| Regeneron Pharmaceuticals Inc. (REGN) | 11.9% |
| Cigna Group (CI) | 11.9% |
Eli Lilly & Co. (LLY)
Eli Lilly produces brand-name prescription drugs to treat a wide range of medical conditions, including diabetes, cancer and neurological disorders. Analyst Sel Hardy says he is bullish on several of Eli Lilly’s late-stage therapies, including donanemab for Alzheimer’s disease, pirtobrutinib for leukemia and lymphoma and tirzepatide for sleep apnea and cardiology. Hardy says these impressive pipeline drugs can serve as a valuable supplement to the company’s existing portfolio of 10 key commercial drugs that currently make up the majority of its sales and generate ongoing growth. CFRA has a “strong buy” rating and $885 price target for LLY stock, which closed at $773.14 on March 25.
Merck & Co. Inc. (MRK)
Merck is one of the world’s largest pharmaceutical companies. Merck reported 6% year-over-year revenue growth in the fourth quarter, including 21% sales growth from leading cancer drug Keytruda. Sales for Merck’s HPV vaccine Gardasil were also up 27%. Hardy says Merck is well positioned for growth in 2024 as the company generates more visible contributions from its 2023 acquisition of Prometheus Bioscience. He says Merck has impressive cardiology and oncology portfolios and has the potential to extend the use of Keytruda and Lynparza to a wider range of indications. CFRA has a “buy” rating and $137 price target for MRK stock, which closed at $125.31 on March 25.
Abbott Laboratories (ABT)
Abbott Laboratories is a diversified health care company and a member of an exclusive club called the Dividend Aristocrats, stocks that have raised their dividends for at least 25 consecutive years. In 2023, Abbott boosted its quarterly dividend by 7.8% from 51 cents to 55 cents and now has a 2% yield. The latest hike marked the 52nd consecutive year Abbott investors have enjoyed a dividend increase. Hardy says Abbott’s growing dividend, expanding market share and diversified business will help it outperform peers in the long term. CFRA has a “buy” rating and $126 price target for ABT stock, which closed at $110.01 on March 25.
AbbVie Inc. (ABBV)
AbbVie is a global pharmaceutical company. Its key drug is Humira for treating rheumatoid arthritis, psoriasis, Crohn’s disease and other conditions. In 2024, Hardy says growth from new immunology drugs Skyrizi and Rinvoq will help offset headwinds from loss of Humira exclusivity. AbbVie projects Skyrizi and Rinvoq will combine for more than $15 billion in sales by 2025, an annual growth rate of at least 52%. Hardy says AbbVie’s Cerevel Therapeutics acquisition will also be a growth contributor once the deal officially closes in mid-2024. CFRA has a “buy” rating and $199 price target for ABBV stock, which closed at $178.53 on March 25.
Danaher Corp. (DHR)
Danaher provides professional, medical, industrial and commercial products. Hardy says Danaher has an improving outlook and is attractively valued following the spinoff of Veralto and the acquisition of Abcam. In fact, Hardy projects the company’s long-term growth could rebound to the mid-single-digit percentage range under its new corporate structure. Looking ahead, he anticipates Danaher will continue to look for opportunities to supplement its growth and expand its margins via strategic merger and acquisition deals. He says revenue growth will also rebound to positive territory in 2024. CFRA has a “buy” rating and $279 price target for DHR stock, which closed at $247.80 on March 25.
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Amgen Inc. (AMGN)
Amgen is one of the world’s largest biotechnology companies. Hardy is bullish on Amgen’s new commercial drugs Tezspire for severe asthma and Lumakras for cancer. In addition, he says Amgen’s development pipeline can provide additional growth opportunities in the long term. Amgen successfully closed its $28 billion acquisition of Horizon Therapeutics in October 2023, and Hardy says Horizon’s Tepezza, Krystexxa and Uplinza will further boost Amgen’s industry-leading collection of rare disease drugs. Hardy says Amgen’s Amjevita is also well positioned to challenge Humira in the plaque psoriasis market. CFRA has a “buy” rating and $352 price target for AMGN stock, which closed at $280.82 on March 25.
Medtronic PLC (MDT)
Medtronic is a health care device manufacturer that operates in four segments: cardiovascular, medical surgical, neuroscience and diabetes. The company recently canceled plans to spin off its patient monitoring and respiratory interventions businesses as part of a strategy to streamline its portfolio and focus on higher-growth sales. Hardy says Medtronic is benefiting from a broad recovery of medical procedure volumes and its impressive slate of new product launches will help create value for investors in 2024 and beyond. He is particularly optimistic about Medtronic’s robotic assisted surgery platform. CFRA has a “buy” rating and $98 price target for MDT stock, which closed at $83.24 on March 25.
Vertex Pharmaceuticals Inc. (VRTX)
Vertex Pharmaceuticals is a biopharmaceutical company that specializes in developing therapies to treat cystic fibrosis, or CF. Vertex also owns the rights to 60% of the profits from sales of Crispr Therapeutics AG (CRSP) gene-editing therapy exa-cel, which was approved by the Food and Drug Administration for treating sickle cell disease in December 2023 and for treating transfusion-dependent beta thalassemia just six weeks later. Hardy says Vertex has a first-mover advantage in the CF market, which is complemented by clinical-stage programs outside of the core CF business, including the gene-editing program. CFRA has a “buy” rating and $484 price target for VRTX stock, which closed at $416.03 on March 25.
Regeneron Pharmaceuticals Inc. (REGN)
Regeneron Pharmaceuticals is a biotech company focused on developing therapies to treat metabolic disorders, inflammatory diseases, cancer and respiratory conditions. Regeneron shares have made healthy gains since the FDA approved the high-dose formulation of wet age-related macular degeneration drug Eylea in August after an earlier rejection due to manufacturing issues. Hardy says Regeneron has posted solid growth numbers and is attractively valued, and it has been successful in diversifying revenues away from Eylea, as the drug faces competition from other manufacturers. He has been particularly impressed by Libtayo, which is approved for treating skin cancer, advanced basal cell carcinoma and non-small cell lung cancer. CFRA has a “buy” rating and $1,075 price target for REGN stock, which closed at $961.09 on March 25.
Cigna Group (CI)
Cigna is one of the largest U.S. employee benefits organizations and pharmacy benefit managers, or PBMs. Analyst Daniel Rich says cost pressures tied to higher medical utilization will likely weigh on the health care segment in 2024, but Cigna’s Evernorth segment is booming thanks to healthy pharmaceutical volumes and services trends. Following the announced sale of its Medicare business, Rich says Cigna will now focus on its core commercial health insurance and PBM businesses. He projects revenue growth will accelerate to 20% in 2024. CFRA has a “buy” rating and $398 price target for CI stock, which closed at $355.55 on March 25.
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10 Best Health Care Stocks to Buy for 2024 originally appeared on usnews.com
Update 03/26/24: This story was previously published at an earlier date and has been updated with new information.
