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Bank of America recommends investing in these 2 pharmaceutical stocks that have the potential for at least 50% growth

Jason Bellier
9. 5. 2023
5 min read

Healthcare companies are attracting investors in times of economic uncertainty. While the U.S. economy is slowing down, analysts at Bank of America say that healthcare stocks will rise as always, which is why they have presented 2 interesting candidates to buy.

According to Bank of America, the positives for the pharmaceutical sector are pretty clear: the healthcare industry typically does well during economic downturns, and Bank of America says the economy is getting worse.

Head of U.S. Equity Selection and Quantitative Strategy Savita Subramanian recently wrote to clients that healthcare outperforms the market during downturns about 70% of the time , and on average outperforms the S&P 500 index by 4.6%.
Strategists Jill Carey Hall and Nicolas Woods added that downturns are the best phases for small healthcare companies, and are usually even better for large healthcare companies.

Subramanian said there are several key reasons to be bullish on the sector, starting with its historical performance during downturns. She also wrote that the sector is stable and defensive and showing strong earnings growth.

"Both earnings volatility and the frequency of earnings declines have been well below the S&P 500," she wrote. "Healthcare has historically generated the strongest earnings growth of any sector, even outperforming technology, whose earnings have been under pressure in recent quarters."

She also explained that over the past five years, health care companies have beaten Wall Street earnings estimates faster than the S&P 500 index as a whole, and she sees upward earnings revisions showing that analysts are bullish on the sector.

HealthEquity $HQY+0.1%

HQY
$83.42 -$0.08 -0.10%
1 Day
+0%
5 Days
+0.24%
1 Month
+10.24%
6 Months
+22.57%
YTD
+24.32%
1 Year
+26.03%
5 Years
+0.8%
Max.
+367.39%

HealthEquity was founded by entrepreneur Steven Neel, who came up with the idea to simplify healthcare financial management for Americans. In 2002, he founded the company and began offering some of the first HSAs (Health Savings Accounts are health savings accounts in the U.S.) on the market. Since then, HealthEquity has grown dynamically and has become a leader in the HSA market.

Today, HealthEquity has more than 1,300 employees across the US. Headquartered in Draper, Utah, it coordinates services for more than 5.4 million HSA accounts with $15.9 billion in assets. HealthEquity offers easy-to-use platforms for managing HSA, FSA, HRA and other accounts and investing funds. Clients appreciate the easy-to-understand accounts, low fees and excellent customer support.

HealthEquity's clients include large employers such as Walmart, HomeDepot and FedEx, and hundreds of health insurance companies. Thanks to long-term contracts with partners, the number of HSA accounts with HealthEquity is growing rapidly, adding 18% in the last year alone.

As the HSA market in the U.S. continues to grow, HealthEquity has tremendous potential for further expansion and growth. In the future, HealthEquity plans to provide additional services such as banking products and investment and insurance services to existing clients. The goal is for Americans to be able to handle all of their healthcare financial needs in one place - with HealthEquity. The company's vision is for every American to have their own HSA account.

Outlook:

-HealthEquity expects the HSA market in the U.S. to grow 25-30% annually over the next few years as more Americans switch to high-deductible health insurance, which HSA accounts support. HealthEquity is ideally positioned to capture a large portion of new HSA accounts.

-By 2025, HealthEquity aims to manage 9-11 million HSA accounts with total assets of $35-45 billion. This represents an ambitious growth plan.

-HealthEquity intends to expand its services to include banking products, insurance and other investment options. The goal is to increase revenue per account and engage more with clients.

Fiscal year 2022 results:

-Total revenue: $750 million. USD 750 million, up 19% from last year.

-Net income: $70 million. USD, pokles o 3 %, způsobený investicemi do růstu a akvizicí.

-Number of HSA accounts: 5.4 million, up 18%, highest ever.

-HSA assets: $15.9 billion, up 33%, record growth.

-Increase in outlook for full fiscal year 2023: revenue $770-790 million. USD 770 million, profit USD 77-81 million. USD 77-7790.

FibroGen $FGEN+14.6%

FGEN
$2.12 $0.27 +14.59%
1 Day
+0.15%
5 Days
-11.68%
1 Month
+111.76%
6 Months
+51.2%
YTD
+127.55%
1 Year
-91.58%
5 Years
-96.77%
Max.
-91.41%

FibroGen is a biotechnology company founded in 1993 and headquartered in San Francisco. FibroGen is focused on developing drugs to treat serious chronic kidney, heart and lung diseases.

FibroGen has a unique competitive advantage - proprietary technology for the discovery and validation of new drug targets. This technology enables FibroGen to identify key proteins and enzymes involved in chronic diseases. Using this technology, FibroGen has developed proprietary drugs that modulate these proteins and enzymes.

Going forward, FibroGen will focus on completing a number of clinical trials and regulatory approval of new drugs. The lead candidate is roxadustat, a drug for the treatment of anemia associated with chronic kidney disease. Roxadustat could enter the market in 2023, according to initial estimates. Other projects are drugs for pulmonary arterial hypertension and idiopathic pulmonary fibrosis.

FibroGen is developing drugs for chronic diseases with an insufficient supply of effective drugs. The lead product is roxadustat, the first oral drug to treat anemia in patients with chronic kidney disease. Roxadustat could replace the expensive injectable drugs that are now the standard treatment.

For 2022, FibroGen:

-Completed regulatory submissions for approval of roxadustat in the US, EU and China. A decision from regulators is expected in 2023.

-Completed an important study of roxadustat that confirmed its efficacy and safety.

-Started a Phase 3 study of roxadustat for the treatment of anemia in patients with congestive heart failure.

-Revenue (2022). USD 222 million. USD 222 million due to high research and development costs. But that may soon change as their drug roxadustat looks very promising and could be approved as early as this year. Cash. USD 501. So they have sufficient funding to continue development of their lead drug candidates.

The FibroGen story shows how challenging and expensive new drug development is. However, FibroGen believes that roxadustat can transform the treatment of chronic kidney disease. If approved this year, FibroGen is looking at commercial success after years of effort.

  • What do you think of the company? 🤔

Please note that this is not financial advice. Every investment must go through a thorough analysis.


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