2 Stocks That Could Be Long-Term Winners for Investors With the economy reporting two consecutive quarters of GDP decline, many analysts believe that the economy has already entered a recession. During periods of market uncertainty, investors should look for...
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With the economy reporting two consecutive quarters of GDP decline, many analysts believe that the economy has already entered a recession. During periods of market uncertainty, investors should look for stocks that could win in the long run based on their strong fundamentals and solid growth prospects. We think Pfizer (PFE) and Eli Lilly (LLY) could be good choices on that front. Let's discuss.
Macroeconomic and geopolitical headwinds have caused significant pain for investors this year as the major indexes have experienced high volatility. The U.S. economy contracted for two consecutive quarters, with the gross domestic product declining at an annualized rate of 0.9% in the second quarter, leading many analysts to believe that a recession has already arrived.
Despite the uncertain macroeconomic conditions, investors could consider investing in stocks that can be long-term winners. These are usually shares of companies that boast strong fundamentals and solid growth prospects.
Pfizer Inc. (PFE) and Eli Lilly and Company (LLY) are two such stocks that investors may consider adding to their portfolios. Based on their solid fundamentals and potential for further growth, these stocks can deliver significant returns in the long run.
Pfizer Inc. (PFE)
PFE is a research-based biopharmaceutical company. It is engaged in discovering, developing, manufacturing, marketing, selling, and distributing biopharmaceutical products. The company develops wellness, prevention, treatments, and cures across geographies.
On June 9, 2022, PFE announced that it had completed the acquisition of ReViral, which is focused on discovering, developing, and commercializing novel antiviral therapeutics that target respiratory syncytial virus (RSV).
Mikael Dolsten, M.D., Ph.D., Chief Scientific Officer, and President, Worldwide Research, Development, and Medical of PFE, said, "This acquisition further demonstrates our commitment to advancing pioneering science – both through our in-house expertise and our work with leading, innovative companies – with the goal of delivering new breakthroughs to patients suffering from serious infectious diseases."
PFE's revenue increased 46.8% year-over-year to $27.74 billion for the second quarter ended June 30, 2022. The company's adjusted net income increased 93.5% year-over-year to $11.65 billion. Also, its adjusted EPS came in at $2.04, representing an increase of 92.4% year-over-year.
Analysts expect PFE's EPS and revenue for fiscal 2022 to increase 49.8% and 25.1% year-over-year to $6.62 and $101.66 billion, respectively. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 18.2% to close the last trading session at $50.61.
PFE's POWR Ratings reflect solid prospects. The company has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has a B grade for Growth, Value, and Quality. Within the Medical – Pharmaceuticals industry, it is ranked first out of 170 stocks. To see the other ratings of PFE for Momentum, Stability, and Sentiment, click here.
Eli Lilly and Company (LLY)
LLY is engaged in the discovery, development, manufacturing, marketing, and sales of pharmaceutical products worldwide. Its subsidiaries include Acanthas Pharma, Inc., Alnara Pharmaceuticals, Inc., ARMO Biosciences, Inc., and Avid Radiopharmaceuticals, Inc.
On May 13, 2022, LLY announced that the U.S. Food and Drug Administration (FDA) approved Mounjaro (tirzepatide) injection. LLY's President Mike Mason said, "We are thrilled to introduce Mounjaro, which represents the first new class of type 2 diabetes medication introduced in almost a decade and embodies our mission to bring innovative new therapies to the diabetes community."
For the fiscal first quarter ended March 31, 2022, LLY's revenue increased 14.7% year-over-year to $7.81 billion. The company's non-GAAP net income increased 61.9% year-over-year to $2.37 billion. Also, its non-GAAP EPS came in at $2.62, representing an increase of 62.7% year-over-year.
For fiscal 2023, LLY's EPS is expected to increase 14.9% year-over-year to $9.33. Its revenue for the quarter ending September 30, 2022, is expected to increase 15.1% year-over-year to $6.78 billion. Over the past year, the stock has gained 33.1% to close the last trading session at $324.15.
LLY's POWR Ratings reflect this promising outlook. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.
It has a B grade for Growth, Stability, Sentiment, and Quality. It is ranked #11 in the same industry. Click here to see the other ratings of LLY for Value and Momentum.
PFE shares fell $0.20 (-0.40%) in premarket trading Tuesday. Year-to-date, PFE has declined -12.26%, versus a -12.87% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master's degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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