Leading vaccine makers like Eli Lilly and Co. (NYSE: LLY), Pfizer Inc. (NYSE: PFE), and AstraZeneca plc (NASDAQ: AZN) may have faded from the spotlight since the peak of the COVID-19 pandemic, but now there is reason to expect renewed interest. As investors look ahead to the second Trump administration, the incoming president's nomination of outspoken vaccine critic Robert F. Kennedy Jr. to the position of U.S. Secretary of Health and Human Services has refocused attention on the future of these companies and their role in the broader pharmaceutical and healthcare sectors.
It is still too early to determine any definitive federal policies for 2025 (or beyond) that could affect these companies. However, some analysts have speculated that the administration might restrict access to vaccines or even ban them outright, which would create a complex landscape for these firms.
Given this evolving environment, now is the time for investors to consider the strengths and opportunities presented by Eli Lilly, Pfizer, and AstraZeneca. Here's why these companies remain compelling investment options:
Eli Lilly: Impressive Roster of Products, Pullback Due to Lowered Guidance
Of the three major vaccine firms listed above, Eli Lilly has performed the strongest over the last year. Shares of LLY have risen by nearly a quarter during that time and by a shocking 543% in the last five years. Eli Lilly's rapid growth has been linked to its deep and varied roster of leading pharmaceutical products, including Trulicity and Mounjaro (treatments for diabetes) and Prozac and Cymbalta (treatments for clinical depression), among many others.
In particular, Eli Lilly's Mounjaro and Zepbound—both with the active ingredient tirzepatide to treat diabetes and foster weight loss—are strong sellers despite up-and-coming competition from companies like Hims & Hers Health Inc. (NYSE: HIMS). For the latest quarter, volume growth for these two products helped to drive a 20% year-over-year improvement to revenues. Eli Lilly's upcoming product pipeline is also impressive. It has recently received FDA approval for Ebglyss, a treatment for moderate-to-severe atopic dermatitis, and approval in Japan for Kisunla, a treatment for early symptomatic Alzheimer's disease.
Despite the overall gains in the last year, LLY shares have dropped by about 16% in the last month after the company lowered its full-year EPS guidance and the top end of its revenue guidance for the same period.
However, the lowered guidance is a result of inventory management and in-process research and development costs rather than fundamental changes in the company's business.
This means that it may be an opportunity to buy LLY shares at a relative bargain.
Pfizer: Sell-Off May Present an Opportunity
Pfizer produces of one of the most popular COVID-19 vaccines in the United States, and so it is perhaps no surprise that shares have pulled back 10.4% in the last month, particularly following the election. But the firm's stock performance has been highly volatile for the entirety of the last year, and it is currently down about 16% in that timeframe.
One upside is that the sell-off of Pfizer shares has made the stock a better value proposition. As of November 25, Pfizer's forward P/E ratio is just 8.8, considerably lower than Eli Lilly at 56.5 and AstraZeneca at 16.2. Pfizer also has a competitive price-to-book ratio of 1.54.
Analysts also continue to see long-term potential for the company following what may be an intermediate period of instability, rating the stock a Moderate Buy and assigning a consensus price target of $32.92, more than 28% above current levels.
AstraZeneca: Surging Demand for Oncology Products Fuels Growth
AstraZeneca beat analyst EPS predictions for its latest quarter thanks to surging demand for some of its oncology products, including Imfinzi and Calquence. These treatments are pivotal in addressing critical needs in cancer care, cementing AstraZeneca's position as a leader in the market.
Building on this momentum, the company raised its full-year guidance for total revenue and core EPS growth, reflecting confidence in its ongoing performance and future prospects. AstraZeneca's strong product lineup is matched by its pipeline, as analysts expect the company to release as many as two dozen new products by the end of the decade.
AstraZeneca is currently rated a Moderate Buy with a consensus price target of $89.75, offering an upside potential of nearly 37% from current levels.
Biotech Leaders Beyond Vaccines
As the vaccine policy landscape evolves under the incoming Trump administration, Eli Lilly, Pfizer, and AstraZeneca are well-equipped to navigate uncertainties and capitalize on their strengths. If you are considering an investment in biotech you might take comfort in stocks that are not too reliant on vaccines for continued revenue growth—and all three of these companies have fast-growing segments completely unrelated to vaccines.
