Health care stocks lagged 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 $4.8 trillion in 2023 and projects it will grow 5.6% annually through 2032, 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 | Upside potential* |
| Eli Lilly & Co. (ticker: LLY) | 20.3% |
| AbbVie Inc. (ABBV) | 8.8% |
| Merck & Co. Inc. (MRK) | 17.1% |
| Thermo-Fisher Scientific Inc. (TMO) | 1.7% |
| Abbott Laboratories (ABT) | -0.9% |
| Amgen Inc. (AMGN) | 10.9% |
| Stryker Corp. (SYK) | 3.2% |
| Regeneron Pharmaceuticals Inc. (REGN) | 4.2% |
| Boston Scientific Corp. (BSX) | 7.2% |
| Medtronic PLC (MDT) | 8.8% |
*As of Sept. 10 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 is bullish on several late-stage Eli Lilly drugs, particularly pirtobrutinib for certain forms of leukemia and lymphoma and tirzepatide for sleep apnea and cardiology. Hardy says the company’s late-stage pipeline will complement its core portfolio of 10 commercial drugs that currently make up the majority of its revenue. He says a larger supply of tirzepatide should boost sales growth in coming quarters. CFRA has a “strong buy” rating and $1,085 price target for LLY stock, which closed at $901.25 on Sept. 10.
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 remain a growth headwind in the near term, but new immunology drugs Skyrizi and Rinvoq will help offset the Humira slowdown. In fact, AbbVie management projects Skyrizi and Rinvoq have a combined potential of more than $15 billion in sales by 2025. Hardy says the August acquisition of Cerevel Therapeutics will also be a growth catalyst. CFRA has a “buy” rating and $217 price target for ABBV stock, which closed at $199.35 on Sept. 10.
Merck & Co. Inc. (MRK)
Merck is one of the world’s largest pharmaceutical companies, and its leading products include cancer drug Keytruda and HPV vaccine Gardasil. Hardy says Merck’s most recent acquisitions will soon begin to make meaningful contributions, improving its overall growth profile. Hardy is particularly impressed by Merck’s cardiology and oncology portfolios and anticipates regulatory approval of expanded indications for Keytruda and Lynparza. He says Acceleron Pharma, which Merck acquired in late 2021, will help Merck penetrate further into the fast-growing cardiovascular disease market. In addition, Hardy says Merck’s March acquisition of Harpoon Therapeutics will boost and diversify Merck’s oncology portfolio. CFRA has a “buy” rating and $135 price target for MRK stock, which closed at $115.33 on Sept. 10.
Thermo-Fisher Scientific Inc. (TMO)
Thermo Fisher Scientific produces analytical instruments and provides laboratory services for life sciences, pharmaceutical and industrial applications. Hardy anticipates a gradual recovery of the life sciences tools and services sub-industry in the second half of 2024 and says Thermo Fisher is well positioned to capitalize on the cyclical strength. In fact, Hardy projects overall revenue growth numbers will start to improve in the third quarter. He says Thermo Fisher can maintain its pandemic momentum and generate solid long-term growth numbers in years ahead. CFRA has a “buy” rating and $635 price target for TMO stock, which closed at $624.21 on Sept. 10.
Abbott Laboratories (ABT)
Abbott Laboratories is a diversified health care company and a member of an exclusive club called the “Dividend Aristocrats,” which are stocks that have raised their dividends for at least 25 consecutive years. In 2023, Abbott boosted its quarterly dividend by 7.8% to 55 cents and now yields about 1.8%. The latest hike marked the 52nd consecutive year Abbott investors have enjoyed a dividend increase. Analyst Paige Meyer says Abbott’s innovative and diversified business, healthy balance sheet and expanding market share will help the stock outperform peers. CFRA has a “buy” rating and $116 price target for ABT stock, which closed at $117.11 on Sept. 10.
Amgen Inc. (AMGN)
Amgen is one of the world’s largest biotechnology companies. Hardy says newly commercialized drugs Tezspire for severe asthma and Lumakras for cancer are promising. In addition, the 2023 acquisition of Horizon Therapeutics is already starting to significantly contribute to Amgen’s financial performance. The Horizon deal added key drugs Tepezza, Krystexxa and Uplinza to Amgen’s portfolio. Amgen’s Amjevita is also going head-to-head with Humira in the plaque psoriasis market, which Hardy estimates is worth more than $25 billion. Amgen’s long-term sales targets suggest roughly 5% annual revenue growth. CFRA has a “buy” rating and $365 price target for AMGN stock, which closed at $328.93 on Sept. 10.
Stryker Corp. (SYK)
Stryker is a medical technology company that specializes in orthopedics and neurotechnology. Meyer says the company’s MAKO robotic arm-assisted orthopedic surgery system is impressive and Stryker has high exposure to the attractive outpatient procedures market. She says the chronic and progressive nature of the conditions impacting Stryker’s patients will support procedure volumes in the long term. Meyer says the acquisition of Wright Medical will boost Stryker’s share of extremities procedures. Stryker also closed an acquisition of French joint replacement company Serf in March, which will increase its European presence. CFRA has a “buy” rating and $377 price target for SYK stock, which closed at $365.05 on Sept. 10.
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 Food and Drug Administration rejected the high-dose formulation of wet age-related macular degeneration drug Eylea. However, Hardy says Regeneron has been successfully diversifying away from Eylea. For example, Hardy says cancer drug Libtayo has a lot of promise, generating 41% year-over-year revenue growth in the most recent quarter. Praluent and Evkeeza have also been impressive sources of sales growth. CFRA has a “buy” rating and $1,185 price target for REGN, which closed at $1,136.35 on Sept. 10.
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 has suffered some execution missteps in the recent past, but she says the company’s diverse pipeline and portfolio of newly launched products suggest Boston Scientific shares are attractively valued at current levels. Meyer is specifically excited about the growth potential of products such as Watchman FLX, Farapulse and ACURATE Neo2. She says rising demand for elective procedures should also be a growth tailwind for Boston Scientific. CFRA has a “buy” rating and $89 price target for BSX stock, which closed at $83.06 on Sept. 10.
Medtronic PLC (MDT)
Medtronic is a health care device manufacturer that operates in four segments: cardiovascular, medical surgical, neuroscience and diabetes. Earlier this year, the company 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 should benefit from recovering global medical procedures volumes. He says the company has an impressive lineup of new products, and its innovation and track record of successful launches stands out among its peer group. CFRA has a “buy” rating and $99 price target for MDT stock, which closed at $90.99 on Sept. 10.
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10 Best Health Care Stocks to Buy for 2024 originally appeared on usnews.com
Update 09/11/24: This story was previously published at an earlier date and has been updated with new information.
