Healthcare Stock Showdown: LLY, CVS, EXAS Healthcare Stock Showdown: LLY, CVS, EXAS

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The recent spike in GLP-1 weight-loss drugs has undoubtedly caused a stir in the stock market, second only to the hype around generative artificial intelligence. This β€œGLP-1 run” has injected a surge of excitement into the biotechnology and healthcare sectors. Nevertheless, it is just the tip of the iceberg in terms of groundbreaking innovations anticipated in the healthcare industry over the coming years.

The evolution of AI in combination with biotechnology is a potent force, and the healthcare space stands to be one of the primary beneficiaries of this alliance. Let’s take a closer look at three Strong Buy-rated healthcare stocks: Eli Lilly (LLY), CVS Health (CVS), and Exact Sciences (EXAS) using TipRanks’ Comparison Tool to gauge their potential going into March.

Eli Lilly’s Charge

Eli Lilly stock has been on fire, soaring to new all-time highs of around $794 per share. The surge in GLP-1 drugs has revitalized the $742.4 billion company, potentially propelling it toward the $1 trillion market cap milestone. Mad Money host Jim Cramer even touted Eli Lilly’s offering as a potential best-selling drug of all time, a remarkable endorsement from a seasoned Wall Street veteran.

The pharmaceutical giant’s offerings, Zepbound and Mounjaro, are tapping into a potentially massive market, potentially extending beyond the obese demographic. With the company also venturing into AI drug discovery through a strategic partnership with Isomorphic Labs, LLY stock seems poised for continued growth. Analysts concur, with 17 Buys and two Holds assigned in the past three months, and an average price target of $778.56, indicating only a marginal 0.5% downside potential.

CVS’s Resurgence

On the other hand, CVS Health appears to be a value play, with its stock trading at a modest valuation of 11.9 times trailing price-to-earnings, well below industry averages. Despite a relatively uneventful year and a downward revision of its 2024 guidance, the company seems primed for a potential comeback amid strategic closures of underperforming pharmacies and investments in data analytics and AI, particularly through a collaboration with Microsoft.

The stock has been assigned 14 Buys and four Holds in the past three months, with an average price target of $88.63, signaling a 14.95% downside potential. With this level of Wall Street support and a competitive valuation, CVS stock presents an intriguing opportunity.

Exact Sciences: A Diagnostic Dynamo

Exact Sciences, the firm behind the innovative colon cancer screening product Cologuard, has seen its stock in a slump despite the product’s continued success. However, Wall Street remains bullish on the company, particularly with an impending earnings report and anticipation surrounding Cologuard 2.0’s FDA approval.

The stock has garnered 10 Buys and one Hold in the past three months, with analysts predicting an average price target of $89.67, implying a substantial 47.1% upside potential. Benchmark even named Exact Sciences one of its β€œbest ideas” for 2024, projecting continued progress in its new product pipeline, with Cologuard at the forefront.

The Verdict

The healthcare sector is teeming with innovation, presenting compelling opportunities for investors eyeing high-rated health plays. Among the three contenders, analysts foresee the most significant gains from EXAS stock, with a 47.1% upside potential for the year ahead.

The views and opinions expressed herein are the author’s own and do not necessarily reflect those of Nasdaq, Inc.

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