The pharmaceutical sector continues to stand out as a resilient and highly profitable corner of the market, even amid global economic uncertainty. In a recent market outlook, JPMorgan analysts highlighted that “pharma remains one of the few sectors with pricing power, stable margins, and long-term structural growth driven by innovation and demographics.” This view reflects growing investor confidence in pharmaceutical companies that can maintain high profit margins through strong pipelines, operational efficiency, and strategic positioning in essential therapeutic areas.
While some legacy players face headwinds from patent cliffs and regulatory scrutiny, a growing number of high-margin pharma stocks are bucking the trend. These companies are leveraging advances in biotechnology, precision medicine, and contract manufacturing to achieve scalable and sustainable profitability. Margins are particularly strong in areas like specialty drugs, biologics, and contract development and manufacturing organizations (CDMOs), where pricing strength and demand visibility are more favorable.
In this article, we highlight 10 high-margin pharmaceutical stocks that are well-positioned to deliver strong returns. These companies not only benefit from secular healthcare trends but also demonstrate disciplined cost structures and reliable earnings power, qualities that are increasingly valuable in a more selective, margin-conscious market environment.
A close-up of a staff member counting pills in a pharmaceutical warehouse.
Our Methodology
To identify high-quality pharmaceutical stocks with strong profitability and promising upside potential, we began by using the Finviz stock screener to generate an initial universe of publicly traded pharma companies. From this list, we filtered for companies with a trailing twelve-month (TTM) operating margin above 25%, signaling strong operational efficiency and pricing power in an increasingly cost-sensitive healthcare environment.
Next, we evaluated these companies based on Wall Street sentiment. Specifically, we analyzed average analyst upside. Finally, we ranked the top 10 qualifying stocks in ascending order of average analyst upside. We have also noted the hedge fund sentiment for each stock as of Q1 2025.
This combined screen offers a powerful lens into the 10 best high-margin pharma stocks to buy now, balancing profitability with forward-looking return potential as assessed by top analysts.
Note: All data was recorded on July 16, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best High-Margin Pharma Stocks to Buy Now
10. Amgen Inc. (NASDAQ:AMGN)
TTM Operating Profit Margin: 30.08%
Average Analyst upside: 5.79%
Number of Hedge Fund Holders: 69
Amgen Inc. (NASDAQ:AMGN) is one of the high-margin pharma stocks to buy now. HSBC has lowered its price target on Amgen Inc. (NASDAQ:AMGN) from $385 to $357 while reiterating a Buy rating, as concerns mount over potential earnings pressure tied to proposed U.S. trade policies. The firm’s updated valuation reflects a more cautious outlook amid geopolitical uncertainty and the possibility of new tariffs on pharmaceutical imports.
In a research note to clients, HSBC warned that a 25% U.S. tariff on certain pharmaceutical products could reduce earnings for companies like Amgen Inc. (NASDAQ:AMGN) by as much as 6% to 14%, depending on the final structure of the policy. While details remain fluid, analysts are increasingly factoring in trade-related headwinds as part of broader risk assessments across the healthcare sector.
Beyond direct tariff exposure, HSBC also highlighted the potential for indirect financial impacts, including shifts in effective tax rates. These changes could further complicate earnings forecasts and weigh on investor sentiment heading into the second half of the year. Despite the lowered target, HSBC maintained a positive long-term view on Amgen, citing the company’s robust pipeline and diversified portfolio of oncology, inflammation, and rare disease therapies. However, the firm acknowledged that near-term macro risks may cloud what has otherwise been a solid year for the biotech giant.
9. AbbVie Inc. (NYSE:ABBV)
TTM Operating Profit Margin: 33.15%
Average Analyst upside: 12.35%
Number of Hedge Fund Holders: 86
AbbVie Inc. (NYSE:ABBV) is one of the high-margin pharma stocks to buy now. AbbVie Inc. (NYSE:ABBV) received a slight boost in analyst sentiment this week as Rothschild & Co Redburn adjusted its price target on the stock to $240 from $239 while maintaining a Buy rating. The revised target reflects continued confidence in AbbVie’s long-term outlook, bolstered by the company’s diversified portfolio and steady performance from its immunology and neuroscience divisions. While the change in target is modest, it underscores analysts’ expectations for gradual upside as AbbVie navigates the post-Humira landscape with its next-generation therapies, including Rinvoq and Skyrizi.
Rothschild & Co Redburn’s reiteration of its bullish stance suggests the firm sees limited downside risk, even as investors weigh headwinds such as pricing pressures and biosimilar competition. AbbVie shares have traded steadily over the past month, reflecting cautious optimism following solid earnings results and recent pipeline updates. The company is set to report next-quarter results later this month, which could offer further clarity on revenue trends and regulatory developments impacting its key assets.
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