JNJ: 3 Buy Rated Pharma Stocks as Cure for this Volatile Market

Pharmaceuticals are the talk of the stock market as the race is on for a coronavirus vaccine. It appeared as though Moderna (MRNA) was the leader yet once closer analysis was performed of the company’s initial vaccine trial, plenty of investors exited their positions.

At the moment, the field is still wide open. Though MRNA might emerge as the winner of the vaccine race, its stock is tumbling. It is quite possible the first vaccine available to the public will be produced by a lesser-known pharma company that has received minimal media attention up to this point in time.

GlaxoSmithKline, Sanofi and Johnson & Johnson are three pharma stocks worth watching closely in the upcoming days and weeks as progress is made toward a COVID-19 vaccine.

Johnson & Johnson (JNJ)

As experienced investors know, diversification is the name of the game. If you are hesitant to invest in a pharma stock with a narrow focus, consider JNJ. JNJ’s focus extends well beyond a potential COVID-19 vaccine. This healthcare giant aims to improve human health through its pharmaceuticals as well as medical devices and a wide array of consumer products.

JNJ has an incredible 250 subsidiaries, meaning this corporate giant has its hands in quite the extensive array of economic pies. This is clearly one of the safest pharma stocks to invest in.

JNJ has a B POWR Rating, highlighted by As in all POWR components but for its B Buy and Hold grade. All in all, JNJ is ranked 16th of more than 200s stocks in the Medical – Pharmaceuticals space.

It is particularly interesting to note JNJ’s average analyst price target is $163.42, more than $6 above its 52-week high of $157. The high forecast for the stock is a lofty $182. Of the 14 Wall Street analysts that provided stock ratings for JNJ, nine rate JNJ a buy, five rate it a hold and none recommend selling.

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GlaxoSmithKline (GSK)

When it comes to pharma stocks, investors should be on the prowl for companies that are developing a coronavirus vaccine as well as myriad other drugs. GSK has such a diverse product portfolio. GSK creates, develops, makes and markets a wide range of pharmaceutical products.

GSK has teamed up with Sanofi (SNY) to develop a S protein candidate to combat the coronavirus. GSK is also combining forces with Mammoth Biosciences to create a CRISPR-based SARS-CoV-2 (coronavirus) test to boot. GSK also has a HIV prevention candidate that has surpassed the performance of that produced by rival Gilead’s Truvada.

The POWR Ratings have GSK rated as a B meaning Buy. Aside from a C Trade Grade, GSK has Bs and As in every other POWR component. Out of 200+ stocks in the Medical – Pharmaceuticals category, GSK ranks 23rd.

Sanofi (SNY)

Healthcare solutions are becoming increasingly important as the massive baby boomer age cohort enters its golden years. In short, there will be a considerable spike in demand for healthcare products and personnel in the years to come. SNY stands to benefit from this trend.

SNY researches, develops and manufactures an array of prescription drugs. As noted above, SNY is working with GSK to develop a coronavirus vaccine. SNY scientists are also hard at work developing drugs for those struggling with diabetes, cardiovascular problems, immune system deficiencies and other maladies.

SNY is about $5 below its 52-week high of $51.84 yet there is still reason to be bullish about this stock. The POWR Ratings have SNY rated as an A, indicating it is a Strong Buy. The company is ranked third out of 214 pharma stocks with As in every single POWR component.

Though SNY recently announced it will sell its 20% stake in Regeneron Pharmaceuticals (REGN), the two pharma powerhouses will continue to collaborate in the years to come. Watch SNY closely as the second half of 2020 approaches. The initial clinical testing of SNY’s potential coronavirus vaccine will commence in these months, potentially providing a launching pad for the stock to reach new heights.

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JNJ shares were trading at $143.62 per share on Wednesday morning, down $0.94 (-0.65%). Year-to-date, JNJ has declined -0.23%, versus a -6.67% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...