Cantor initiates coverage of U.S. large-cap pharma stocks: Gilead, AbbVie at Buy

Investing.com -- Cantor Fitzgerald initiated or transferred coverage on 10 large-cap U.S. biopharma stocks in a note Tuesday, highlighting a selective approach that favors dominant franchises with strong growth visibility and limited exposure to policy headwinds. 

The firm issued Overweight ratings on six names, including Gilead Sciences (NASDAQ:GILD), Eli Lilly (NYSE:LLY) and AbbVie (NYSE:ABBV), while assigning Neutral ratings to Amgen (NASDAQ:AMGN), Bristol Myers (NYSE:BMY) Squibb, Pfizer (NYSE:PFE), and Merck (NSE:PROR).

“We would refrain from a blanket sector-wide approach toward Pharma given the wide bifurcation of growth profiles and idiosyncratic exposures to tariffs / taxes, IRA/MFN drug pricing, and hot-button HHS/FDA issues,” analysts wrote in their industry launch report.

Gilead, rated Overweight with a $125 price target, was cited for having a “durable 4%+ CAGR into the mid-2030s,” with additional upside from pipeline developments that could extend the company’s HIV franchise into 2040.

AbbVie, also rated Overweight with a $210 price target, offers what Cantor described as a “combination of offense and defense,” pointing to continued momentum in Rinvoq and Skyrizi. 

Analysts also highlighted the company's attractive profile given “the lack of major clinical binary catalyst.”

Meanwhile, Eli Lilly is expected to further consolidate its leadership position in obesity, “driving GLP-1 revenues to $85bn+.”

Cantor also issued Overweight ratings on Vertex (NASDAQ:VRTX), Regeneron (NASDAQ:REGN), and Vaxcyte. 

Among the four Neutral-rated stocks, Cantor noted that Amgen faces challenges adding value “given the sizable valuation already assigned to MariTide.” 

Meanwhile, Bristol Myers, Pfizer, and Merck are “staring down structural growth challenges and lack visibility on a return to growth” before the end of the decade.