Health care stocks underperformed 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 trips to the doctor just because the economy slumps.
U.S. health care spending totaled an estimated $4.8 trillion in 2023 and is expected to grow an average of 5.6% annually through 2032, according to the Centers for Medicare and Medicaid Services, providing excellent long-term investment opportunities.
[Sign up for stock news with our Invested newsletter.]
Here are 10 of the best health care stocks to buy in 2024, according to CFRA analysts:
| Stock | Implied upside* |
| Eli Lilly & Co. (ticker: LLY) | 11.9% |
| Merck & Co. Inc. (MRK) | 14.5% |
| AbbVie Inc. (ABBV) | 14.9% |
| Thermo-Fisher Scientific Inc. (TMO) | 13.6% |
| Danaher Corp. (DHR) | 10.6% |
| Abbott Laboratories (ABT) | 21.8% |
| Amgen Inc. (AMGN) | 17.7% |
| Vertex Pharmaceuticals Inc. (VRTX) | 2.2% |
| Boston Scientific Corp. (BSX) | 7.6% |
| Regeneron Pharmaceuticals Inc. (REGN) | 1.4% |
*As of June 17 close. Based on 12-month target prices.
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 Eli Lilly has several bullish catalysts ahead in 2024 and beyond, including Alzheimer’s disease drug donanemab, cancer drug pirtobrutinib and sleep apnea and cardiology drug tirzepatide. Hardy says this pipeline could complement the 10 commercial-stage drugs that currently make up the majority of Eli Lilly’s sales. He says both solid growth from current products and future pipeline development will create value for investors. CFRA has a “strong buy” rating and $990 price target for LLY stock, which closed at $885.01 on June 17.
Merck & Co. Inc. (MRK)
Merck is one of the world’s largest pharmaceutical companies. Merck recently reported 9% year-over-year revenue growth in the first quarter, including 20% sales growth from leading cancer drug Keytruda. Sales for Merck’s HPV vaccine Gardasil were also up 14%. Hardy says Merck is positioned for healthy growth in 2024, and investors should start to get more clarity surrounding Acceleron Pharma and integration of Merck’s other recent acquisitions. Hardy is particularly bullish on Merck’s oncology and cardiology portfolios, and he anticipates additional indications for Keytruda and Lynparza. CFRA has a “buy” rating and $146 price target for MRK stock, which closed at $127.50 on June 17.
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. Hardy says loss of exclusivity for Humira will weigh on AbbVie’s growth profile, but growth from immunology drugs Skyrizi and Rinvoq will help ease that pain in 2024. In fact, AbbVie management projects Skyrizi and Rinvoq will generate at least $15 billion in combined annual sales by 2025, a compound annual growth rate of at least 52%. Hardy says AbbVie will close its Cerevel Therapeutics acquisition by midyear. CFRA has a “buy” rating and $195 price target for ABBV stock, which closed at $169.68 on June 17.
Thermo-Fisher Scientific Inc. (TMO)
Thermo Fisher Scientific produces analytical instruments and provides laboratory services for life sciences, pharmaceutical and industrial applications. Hardy has a neutral outlook for the life sciences tools and services industry as a whole, but expects demand will gradually start to recover starting in the second half of 2024. Nevertheless, Hardy is bullish on Thermo Fisher and says the company executed well during the COVID-19 pandemic. He says Thermo Fisher has a solid long-term growth trajectory and will benefit from a rebound in China sales. CFRA has a “buy” rating and $645 price target for TMO stock, which closed at $568 on June 17.
Danaher Corp. (DHR)
Danaher provides professional, medical, industrial and commercial products. Hardy says the spin-off of Veralto and the acquisition of Abcam make the restructured Danaher an attractively valued investment opportunity. He says the post-Veralto Danaher could even return to pre-pandemic growth rates in the mid-single-digit percentage range. In addition, Hardy says Danaher will be free to focus on life sciences and diagnostics innovation to create value for investors. The Abcam deal will also increase Danaher’s exposure to drug discovery and improve its complex disease mapping processes. CFRA has a “buy” rating and $281 price target for DHR stock, which closed at $254.13 on June 17.
[READ: 7 Top Gene-Editing Stocks to Buy.]
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 from 51 cents to 55 cents and now yields 2.1%. The latest hike marked the 52nd consecutive year Abbott investors have enjoyed a dividend increase. Analyst Paige Meyer says Abbott has a strong balance sheet, a growing dividend and opportunities to expand market share in the long term. CFRA has a “buy” rating and $126 price target for ABT stock, which closed at $103.45 on June 17.
Amgen Inc. (AMGN)
Amgen is one of the world’s largest biotechnology companies. Hardy says new commercial drugs Tezspire for severe asthma and Lumakras for cancer are off to a promising start, and the company’s impressive pipeline of future drug candidates makes Amgen a compelling long-term investment. Amjevita will allow Amgen to enter the plaque psoriasis market, which Hardy estimates could be worth more than $25 billion. In addition, Hardy says Amgen’s $28 billion acquisition of Horizon Therapeutics will add rare disease drugs Tepezza, Krystexxa and Uplinza to the Amgen portfolio. CFRA has a “buy” rating and $357 price target for AMGN stock, which closed at $303.28 on June 17.
Vertex Pharmaceuticals Inc. (VRTX)
Vertex Pharmaceuticals is a biopharmaceutical company that specializes in developing therapies to treat cystic fibrosis (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 (SCD) in December 2023 and for treating transfusion-dependent beta thalassemia (TDT) just six weeks later. Hardy says Vertex has a first-mover advantage in the CF market and also has an expanding, diversified drug pipeline outside of CF treatment. CFRA has a “buy” rating and $484 price target for VRTX stock, which closed at $473.69 on June 17.
Boston Scientific Corp. (BSX)
Boston Scientific is a medical device manufacturer that specializes in cardiovascular, rhythm management and medical-surgical equipment. Meyer says Boston Scientific’s recent financial numbers have been lackluster, but she still believes in the company’s opportunity to churn out compelling new products and maintain a strong competitive positioning over time. She says products such as the Watchman FLX, Exalt-D and POLARx will help drive growth for Boston Scientific, and a recovery in elective medical procedures to pre-pandemic levels will further boost sales and fuel peer-leading growth for the company. CFRA has a “buy” rating and $82 price target for BSX stock, which closed at $76.19 on June 17.
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 took a big hit in June 2023 after the FDA rejected the high-dose formulation of wet age-related macular degeneration drug Eylea. However, Hardy says Regeneron has made an impressive effort to diversify its business away from Eylea to maintain long-term growth even as Eylea faces competition from biosimilars. Hardy says cancer drug Libtayo is putting up particularly impressive sales growth numbers for Regeneron. CFRA has a “buy” rating and $1,060 price target for REGN stock, which closed at $1,045.37 on June 17.
More from U.S. News
8 Best Real Estate Stocks to Buy
7 Best Cheap Dividend Stocks to Buy Under $10
7 Dividend Stocks to Buy and Hold Forever
10 Best Health Care Stocks to Buy for 2024 originally appeared on usnews.com
Update 06/18/24: This story was previously published at an earlier date and has been updated with new information.
