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Eli Lilly became the first pharmaceutical company to top $1 trillion in market value in 2025.
An aging population and improvements in technology are fueling the growth and promise of pharma stocks.
The best pharmaceutical stocks to buy now include five companies with promising drug pipelines.
Eli Lilly (LLY), the Indianapolis-based drugmaker, recently made news by becoming the first pharmaceutical company to top $1 trillion in market value, thanks in part to its breakout weight-loss drugs, Mounjaro and Zepbound. Are other pharma stocks worth a look?
Are Pharmaceutical Stocks a Good Investment?
Pharmaceutical firms have long been viewed as a blend of defensive income plays and growth opportunities. As demand for medicines, vaccines, and chronic-disease treatments remains steady regardless of economic cycles, pharma companies often deliver stable earnings. That stability — combined with generous dividends many pharma companies pay — makes them especially attractive when the broader market is choppy or inflation is high.
Additionally, the global pharmaceutical industry continues to grow: Analysts expect the sector to expand over the coming years, aided by rising demand for treatments for chronic illnesses, oncology, vaccines and demographic factors such as aging populations.
However, pharmaceutical investing isn’t risk-free. Outcomes often depend on R&D success, regulatory approvals, patent expirations, and competitive pressures. That’s why smart investors often balance stable dividend-payers with growth-oriented firms or diversify across multiple names.
Here, we analyze and rank the best pharmaceutical stocks to buy now ranked on a blend Zacks Rank signals, Style Scores and fundamentals:
This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.
An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%.
The Zacks Sector Rank assigns a rating to each of the 16 Sectors based on their average Zacks Rank.
A sector with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The sector with the best average Zacks Rank would be considered the top sector (1 out of 16), which would place it in the top 1% of Zacks Ranked Sectors. The sector with the worst average Zacks Rank (16 out of 16) would place in the bottom 1%.
The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
The scores are based on the trading styles of Value, Growth, and Momentum. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score.
Value ScoreA
Growth ScoreA
Momentum ScoreA
VGM ScoreA
Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.
The technique has proven to be very useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time, while they also saw 28.3% annual returns on average, according to our 10 year backtest.
Amneal Pharmaceuticals is building a stronger presence in the fast-growing biosimilars market alongside its established generics and specialty businesses. The company expects the Kashiv BioSciences acquisition to expand its biologics manufacturing network, accelerate pipeline development and support recurring biosimilar launches over the coming years. Backed by expanding product capabilities and long-term growth targets extending into the next decade, Amneal remains well placed for sustained growth.
Potential Risks
The company faces risks tied to biosimilar approvals, transaction-related costs, integration hurdles, leverage pressure and delays in commercial launches that could affect profitability and future expansion plans.
Forecast
A Zacks Rank #2 (Buy) with A for Value and solid B grades for Growth and Momentum suggest revisions are constructive without requiring perfection. The Price, Consensus & EPS Surprise chart shows 2025–2027 EPS consensus stair-stepping higher alongside a multi-quarter run of mostly positive surprises, which typically supports further estimate lift if guidance holds.
This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.
An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%.
The Zacks Sector Rank assigns a rating to each of the 16 Sectors based on their average Zacks Rank.
A sector with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The sector with the best average Zacks Rank would be considered the top sector (1 out of 16), which would place it in the top 1% of Zacks Ranked Sectors. The sector with the worst average Zacks Rank (16 out of 16) would place in the bottom 1%.
The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
The scores are based on the trading styles of Value, Growth, and Momentum. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score.
Value ScoreA
Growth ScoreA
Momentum ScoreA
VGM ScoreA
Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.
The technique has proven to be very useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time, while they also saw 28.3% annual returns on average, according to our 10 year backtest.
Theravance Biopharma is a profitable commercial-stage respiratory biotech focused on YUPELRI, the only once-daily nebulized LAMA for COPD approved in the United States. The firm expects restructuring-driven operating expense reductions of nearly 60% and projects $60 to $70 million in annualized cash flow beginning in the third quarter of 2026.
Potential Risks
Theravance remains dependent on YUPELRI growth and TRELEGY-linked milestones. Restructuring execution risks and strategic-review uncertainty could pressure future performance and cash generation.
Forecast
A Zacks Rank #2 and an A for Value with a B for Growth point to favorable revision momentum even though the Momentum Score is F. The chart shows 2026–2027 EPS estimates turning up after a choppy 2025 line, with recent surprises skewing positive as the stock broke higher, an alignment that can keep estimates drifting upward if royalties stay resilient.
This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.
An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%.
The Zacks Sector Rank assigns a rating to each of the 16 Sectors based on their average Zacks Rank.
A sector with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The sector with the best average Zacks Rank would be considered the top sector (1 out of 16), which would place it in the top 1% of Zacks Ranked Sectors. The sector with the worst average Zacks Rank (16 out of 16) would place in the bottom 1%.
The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
The scores are based on the trading styles of Value, Growth, and Momentum. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score.
Value ScoreA
Growth ScoreA
Momentum ScoreA
VGM ScoreA
Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.
The technique has proven to be very useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time, while they also saw 28.3% annual returns on average, according to our 10 year backtest.
Enliven Therapeutics is advancing a next-generation leukemia treatment candidate, ELVN-001, aimed at improving outcomes for patients with chronic myeloid leukemia. The company is preparing to move the drug into a late-stage study in 2026 after encouraging early clinical data showed promising response rates and manageable side effects. With growing demand for better-targeted cancer therapies, ELVN-001 could strengthen Enliven’s long-term growth prospects.
Potential Risks
The company is still in the clinical stage, so disappointing trial results, safety concerns, regulatory setbacks, or rising competition in leukemia treatments may negatively affect investor sentiment.
Forecast
A Zacks Rank #2 with a B for Growth but C scores for Value and Momentum implies analysts like the science more than recent price action. The chart shows loss expectations broadly stable to slightly improving across 2025–2027, and surprises are mixed, so the next data catalyst is likely to drive estimate direction.
This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.
An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%.
The Zacks Sector Rank assigns a rating to each of the 16 Sectors based on their average Zacks Rank.
A sector with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The sector with the best average Zacks Rank would be considered the top sector (1 out of 16), which would place it in the top 1% of Zacks Ranked Sectors. The sector with the worst average Zacks Rank (16 out of 16) would place in the bottom 1%.
The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
The scores are based on the trading styles of Value, Growth, and Momentum. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score.
Value ScoreA
Growth ScoreA
Momentum ScoreA
VGM ScoreA
Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.
The technique has proven to be very useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time, while they also saw 28.3% annual returns on average, according to our 10 year backtest.
Phibro Animal Health develops animal-health and nutrition products, with fiscal third-quarter 2026 animal-health sales rising 13% and vaccines growing 16% year over year. Management’s updated fiscal 2026 outlook projects net sales of $1.460 to $1.500 billion and adjusted EBITDA of $247 to $255 million, supported by continued animal-protein demand, Sustainable Solutions initiatives and momentum across nutritional specialties and Z-Product portfolios in the coming reporting periods.
Potential Risks
Regulatory developments in Brazil affecting certain antimicrobial products, weaker Performance Products sales and elevated leverage, including $741 million debt, could pressure profitability and financial flexibility during fiscal 2026.
Forecast
A Zacks Rank #2 pairs with Style Scores of A for Value and Momentum, but the F for Growth suggests expectations are already elevated. The chart shows 2025–2027 EPS estimates climbing in steps with a cluster of recent beats, supporting further revisions if integration benefits keep flowing through margins.
This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.
An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%.
The Zacks Sector Rank assigns a rating to each of the 16 Sectors based on their average Zacks Rank.
A sector with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The sector with the best average Zacks Rank would be considered the top sector (1 out of 16), which would place it in the top 1% of Zacks Ranked Sectors. The sector with the worst average Zacks Rank (16 out of 16) would place in the bottom 1%.
The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
The scores are based on the trading styles of Value, Growth, and Momentum. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score.
Value ScoreA
Growth ScoreA
Momentum ScoreA
VGM ScoreA
Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.
The technique has proven to be very useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time, while they also saw 28.3% annual returns on average, according to our 10 year backtest.
Amphastar Pharmaceuticals makes inhalers, injectable medicines and nasal therapies, supported by its own research and manufacturing network in the United States. The company expects newer biosimilar and proprietary products to drive future growth, while expanding BAQSIMI and Primatene MIST sales, along with upcoming launches such as AMP-018 and AMP-004, could strengthen revenue, market reach and long-term growth potential.
Potential Risks
Higher research and marketing expenses may pressure profits, while delays in new product launches or weaker demand for key products like BAQSIMI and Primatene MIST could hurt growth.
Forecast
With a Zacks Rank #3 (Hold) and a Growth Score of D, AMPH lacks the revision-driven growth signal seen in Rank #1–#2 stocks, despite A grades for Value and Momentum. The chart shows 2025–2027 EPS expectations stepping down from prior highs and recent surprises tilting negative as the price trend weakened, implying margins must stabilize to turn estimates higher.
The Zacks Rank is a proprietary stock-rating model that uses trends in earnings estimate revisions and earnings-per-share (EPS) surprises to classify stocks into five groups: #1 (Strong Buy), #2 (Buy), #3 (Hold), #4 (Sell) and #5 (Strong Sell). The Zacks Rank is calculated through four primary factors related to earnings estimates: analysts' consensus on earnings estimate revisions, the magnitude of revision change, the upside potential and estimate surprise (or the degree in which earnings per share deviated from the previous quarter).
Zacks builds the data from 3,000 analysts at over 150 different brokerage firms. The average yearly gain for Zacks Rank #1 (Strong Buy) stocks is +23.62% per year from January, 1988, through June 2, 2025.
Selections for Best Pharmaceutical Stocks are based on the current top ranking stocks based on Zacks Indicator Score and other factors. For this list, only companies that have average daily trading volumes of 100,000 shares or more are considered. All information is current as of market open, May 15, 2026.
Learn More about Pharmaceutical Stocks
What are Pharmaceutical Stocks?
“Pharmaceutical stocks” refer to publicly traded companies engaged primarily in the discovery, development, manufacturing, and sale of drugs — including brand-name medicines, biologics, vaccines and sometimes generics.
Types of Pharmaceutical Stocks
Large-cap, established pharmaceutical companies – These are the global leaders with diverse drug portfolios, steady revenue streams, and long histories of paying dividends. Examples include Pfizer (PFE - Free Report), Merck (MRK - Free Report), Johnson & Johnson (JNJ - Free Report), AbbVie (ABBV - Free Report), Bristol-Myers Squibb (BMY - Free Report) and Novartis (NVS). These companies tend to have well-funded pipelines and wide geographic reach, making them popular with conservative investors.
Specialty-drug and focused biopharma firms – These companies concentrate on specific therapeutic areas such as rare diseases, oncology, immunology, or metabolic conditions. They can deliver strong growth if a breakthrough therapy succeeds. Examples include Vertex Pharmaceuticals (VRTX - Free Report) in genetic diseases, Regeneron (REGN - Free Report) in immunology and ophthalmology, Incyte (INCY - Free Report) in oncology and Horizon Therapeutics (HZNP - Free Report) in autoimmune disorders.
Pipeline-driven or R&D-intensive pharmaceutical developers – These companies may have fewer commercialized drugs but invest heavily in research, clinical trials, and next-generation treatments. Revenue may be uneven, but the upside can be significant if major approvals come through. Notable examples include Moderna (MRNA - Free Report) in mRNA therapeutics, BioNTech (BNTX - Free Report) in immuno-oncology, Alnylam Pharmaceuticals (ALNY - Free Report) in RNA interference drugs and Sarepta Therapeutics (SRPT - Free Report) in genetic therapies.
Pros of Pharmaceutical Stocks
Consistent demand for medicines: Healthcare needs remain steady regardless of economic cycles, helping companies like Merck, Eli Lilly (LLY - Free Report), or AstraZeneca (AZN - Free Report) maintain dependable revenue.
Attractive dividends: Many large pharmaceutical companies, such as Pfizer, AbbVie, and Johnson & Johnson, are known for long-standing dividend programs and high payout reliability.
Potential for major upside from drug launches: A successful approval or breakthrough therapy—such as Eli Lilly’s diabetes/obesity drugs or Regeneron’s eye-disease treatments—can significantly boost a company’s valuation.
Diversification within healthcare: Pharma stocks often behave differently from technology, consumer, or financial sectors, providing balance to an investment portfolio.
Cons of Pharmaceutical Stocks
Regulatory hurdles: Failure to secure FDA approval, clinical-trial setbacks, or safety concerns can sharply impact valuations when trials don’t meet expectations.
Patent cliffs and generic competition: Once exclusivity ends, branded drugs can face rapid erosion from generics or biosimilars. For instance, AbbVie’s Humira — once the world’s top-selling drug — saw sales drop after biosimilar competition entered the market.
Competitive pressures: New drugs from rivals can displace existing blockbusters. For example, Novo Nordisk (NVO - Free Report) and Eli Lilly (LLY) dominate the obesity/diabetes segment, squeezing competitors.
High research costs and uncertainties: Pharma R&D is expensive and unpredictable. Firms like Moderna, Alnylam, or Sarepta often experience stock volatility tied directly to clinical-trial outcomes or scientific feasibility.
Best Pharmaceutical Stocks vs. Biotechnology Stocks: Which Is Better?
Pharmaceutical companies (large-cap pharma) These firms—such as Merck, Pfizer, AbbVie, and Novartis—tend to be more stable due to established product lines and recurring revenue. They typically appeal to income-focused investors because they often pay strong and consistent dividends.
Biotechnology companies Biotech firms like Regeneron, Vertex, Moderna, and BioNTech often target cutting-edge scientific approaches with high growth potential. Their revenues can surge when a breakthrough therapy succeeds, but they face much greater volatility and dependency on research outcomes.
If you prefer steady dividends and lower volatility, large U.S. and international pharma names are generally a better fit.
If you’re seeking high potential returns and can handle larger price swings, biotech and R&D-intensive drug developers may offer superior upside.
Many investors blend both categories to balance income with innovation-driven growth.
Risks and Safety
How do FDA approvals impact stock prices?
Securing FDA approval for a new drug can be a major catalyst: positive news can dramatically boost stock price. Conversely, delays, negative trial results, or regulatory setbacks can result in sharp declines. That’s why even solid firms factor in “uncertainty rating” — because much hinges on regulatory success.
How do patent expirations affect pharmaceutical stocks?
When a drug’s patent expires, generics may enter, often severely reducing sales for the original drug — which can lead to revenue decline unless the company successfully replaces the lost revenue with new drugs or therapies.
What are the biggest risks when investing in drug companies?
R&D failure and sunk costs.
Regulatory hurdles and unpredictable approval processes.
Litigation, pricing pressure, changes in healthcare policy and regulation.
Concentration risk if a company relies heavily on a few blockbuster drugs.
Pharmaceutical Stocks Trends
Which pharmaceutical stock benefits the most from aging population trends?
Large-cap companies with broad portfolios — especially those offering treatments for chronic diseases (e.g., cardiovascular, cancer, auto-immune, diabetes) — tend to benefit from demographic trends. Firms like Merck, AbbVie, and others with diversified pipelines may be especially well positioned.
How have pharmaceutical stocks performed in the last 5 years?
Many large-cap pharma stocks have offered attractive dividend yields and moderate growth, often outperforming more cyclical sectors, especially in volatile markets. Their relative resilience and dividends have appealed to investors seeking stability.
Are pharma stocks recession-proof?
Not entirely — but compared with consumer discretionary or cyclical sectors, pharma tends to be more resilient. Demand for essential medicines tends to remain stable even during economic downturns, giving pharma a defensive characteristic.
How to Invest in Pharmaceutical Stocks
Should beginners invest in pharma ETFs instead of single stocks?
Yes — for many retail investors, pharma-focused ETFs (or broader healthcare ETFs) offer diversified exposure, reducing the risk of overconcentration in a single company. This mitigates risks like regulatory failure or drug-specific setbacks.
Is it better to invest in global or U.S. pharmaceutical companies?
Both have advantages. U.S. firms often lead in innovation, R&D, and large-scale global distribution. International companies may offer exposure to different markets, drug pipelines, and potentially attractive valuations. A mix of both can provide balanced diversification.
View the Zacks #1 Rank List
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