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.
8. Pfizer, Inc. (NYSE:PFE)
TTM Operating Profit Margin: 26.33%
Average Analyst upside: 15.06%
Number of Hedge Fund Holders: 99
Pfizer, Inc. (NYSE:PFE) is one of the high-margin pharma stocks to buy now. Bristol-Myers Squibb Company (NYSE:BMY) and Pfizer, Inc. (NYSE:PFE) have announced a direct-to-patient program for Eliquis (apixaban), their top-selling blood thinner, in a move aimed at improving access for uninsured and underinsured patients. Starting September 8, 2025, eligible individuals will be able to purchase a 30-day supply of Eliquis for approximately $346, more than 40% below the current list price of $606, through a new subscription-based model that includes direct shipping and personalized support.
The initiative, called Eliquis 360 Support, will be available in all U.S. states and Puerto Rico. It will also provide patients with help navigating insurance options and educational resources for managing cardiovascular conditions. Eliquis, widely prescribed to prevent stroke and treat deep vein thrombosis, generated over $11 billion in global sales last year and remains one of the most important assets in the portfolios of both companies.
This marks a significant shift in drug distribution strategy, aligning with broader industry trends toward transparency and affordability. While the new price still exceeds the $231 monthly Medicare-negotiated rate that will take effect in 2026, the companies are preemptively responding to mounting political and regulatory scrutiny over drug costs. It also follows similar direct-to-patient initiatives launched by rivals such as Eli Lilly and Novo Nordisk.
Although most current Eliquis users are insured, the move helps both companies position themselves as proactive on affordability while potentially defending prescription volume as generic competition looms. For Pfizer and Bristol Myers, it’s a strategic play that reflects evolving market and policy pressures.
7. Royalty Pharma plc (NASDAQ:RPRX)
TTM Operating Profit Margin: 83.95%
Average Analyst upside: 19.55%
Number of Hedge Fund Holders: 33
Royalty Pharma plc (NASDAQ:RPRX) is one of the high-margin pharma stocks to buy now. Royalty Pharma plc (NASDAQ:RPRX) received a vote of confidence from Morgan Stanley this week as analyst Terence Flynn raised the firm’s price target to $54 from $51 while maintaining an Overweight rating. The adjustment reflects a favorable outlook on the company’s cash flow durability and its ability to weather broader industry headwinds.
Flynn noted in a client note that large-cap pharmaceutical and biotech names have struggled to gain traction this year, weighed down by macroeconomic pressures and lingering regulatory uncertainty. Challenges such as evolving drug pricing frameworks, international tariff exposure, and ongoing personnel shifts within the FDA have all contributed to investor caution across the healthcare space.
Despite this backdrop, Royalty Pharma continues to distinguish itself through its unique business model, which centers on acquiring royalty streams tied to established and emerging therapies. The company’s portfolio, anchored by revenue from blockbuster drugs such as Tysabri, Imbruvica, and Trelegy, has offered a more stable earnings profile than many of its industry peers.
Flynn’s upward revision suggests Royalty Pharma remains well-positioned in a sector facing ongoing volatility, with defensive qualities that appeal to investors seeking income and resilience in a complex policy and economic environment.
6. Merck & Company, Inc. (NYSE:MRK)
TTM Operating Profit Margin: 38.19%
Average Analyst upside: 25.02%
Number of Hedge Fund Holders: 93
Merck & Company, Inc. (NYSE:MRK) is one of the high-margin pharma stocks to buy now. Jefferies has raised its price target on Merck & Co. (NYSE: MRK) to $141 from $138 while maintaining a Buy rating, citing increased conviction in the company’s recent acquisition of Verona Pharma. The firm’s analysts see the $10 billion deal as a strategic step to diversify Merck’s pipeline and reduce long-term reliance on its flagship cancer drug, Keytruda.
In a research note, Jefferies highlighted Verona’s lead asset, ensifentrine, as a potentially meaningful addition to Merck’s respiratory portfolio. The drug, which is being developed for chronic obstructive pulmonary disease (COPD), offers a differentiated mechanism of action and a favorable safety profile, according to analysts. They estimate the acquisition could add approximately $3 per share in value under a base-case scenario. Even under more conservative assumptions, the transaction is still expected to be accretive.
The target increase comes as Merck & Co. (NYSE: MRK) continues to face pressure to shore up its post-Keytruda growth strategy, with the immunotherapy expected to lose U.S. exclusivity in the coming years. Jefferies’ revised outlook signals confidence in Merck’s ability to execute on strategic M&A while maintaining earnings visibility. Shares of Merck have remained stable following the announcement, reflecting cautious investor optimism as the company pivots toward new therapeutic areas.
5. Eli Lilly and Company (NYSE:LLY)
TTM Operating Profit Margin: 41.07%
Average Analyst upside: 25.12%
Number of Hedge Fund Holders: 119
Eli Lilly and Company (NYSE:LLY) is one of the high-margin pharma stocks to buy now. Eli Lilly and Company (NYSE:LLY) is set to report second-quarter results on August 7, and J.P. Morgan’s Chris Schott believes the stage is set for another strong showing. In a recent note, Schott outlined what he calls an “attractive setup” for the pharma heavyweight, pointing to continued momentum in its GLP-1 portfolio, led by weight-loss treatments Zepbound and Mounjaro.
Schott is projecting second-quarter sales of $14.8 billion, about $370 million above Wall Street consensus. His bullish forecast is fueled by surging demand for Lilly’s GLP-1 drugs, with combined sales expected to reach $8.8 billion, a 60% year-over-year increase. Zepbound now commands an estimated 60–65% share of the obesity market, while Mounjaro continues to gain traction globally.
Though he expects earnings per share of $5.49, slightly below consensus due to increased R&D and marketing spend,Schott remains upbeat on the company’s broader growth trajectory. He anticipates any temporary headwinds from CVS formulary adjustments will be short-lived, with GLP-1 prescription growth expected to reaccelerate by the end of the year.
Looking ahead, Schott is optimistic about Eli Lilly’s pipeline, especially the once-daily oral GLP-1 candidate orforglipron. He sees the upcoming Phase 3 obesity data as a key catalyst and believes the drug could expand Lilly’s market leadership. With minimal patent risk and strong long-term visibility, Schott maintains an Overweight rating on the stock and a $1,100 price target, viewing current levels as an attractive entry point.
4. United Therapeutics Corporation (NASDAQ:UTHR)
TTM Operating Profit Margin: 49.35%
Average Analyst upside: 29.92%
Number of Hedge Fund Holders: 43
United Therapeutics Corporation (NASDAQ:UTHR) is one of the high-margin pharma stocks to buy now. Morgan Stanley has lowered its price target on United Therapeutics (NASDAQ: UTHR) to $328 from $348, while maintaining an Equal Weight rating, amid broader headwinds facing the biotech and pharmaceutical sectors. The firm flagged persistent macroeconomic challenges and regulatory uncertainties that continue to weigh on investor sentiment across the space.
In a research note to clients, the firm pointed to several factors pressuring large-cap healthcare names this year, including policy volatility around drug pricing, ongoing debates over international transfer pricing, and staffing turnover at the FDA. Against that backdrop, United Therapeutics is facing specific questions about near-term sales performance, particularly around its key pulmonary arterial hypertension therapy, Tyvaso.
Morgan Stanley is now modeling second-quarter Tyvaso sales of $442 million, below the Street consensus of $483 million. Total revenue is expected to reach $768 million, also under consensus estimates of $805 million. The firm attributes the cautious outlook to potential softness in Tyvaso DPI uptake and less momentum in patient onboarding than previously projected.
Despite strong fundamentals and long-term growth driver, including its organ manufacturing pipeline, Morgan Stanley appears to be taking a more conservative stance in the near term. With shares already reflecting much of the upside potential, the firm sees a more balanced risk-reward profile at current levels.
3. Zoetis Inc. (NYSE:ZTS)
TTM Operating Profit Margin: 37.02%
Average Analyst upside: 31.93%
Number of Hedge Fund Holders: 74
Zoetis Inc. (NYSE:ZTS) is one of the high-margin pharma stocks to buy now. Argus has trimmed its price target on Zoetis Inc. (NYSE: ZTS) to $190 from $200, maintaining a cautious but constructive view on the animal health giant. While the firm did not change its overall outlook, the revised target reflects a more tempered near-term assessment of valuation and broader market conditions.
Zoetis, a global leader in veterinary pharmaceuticals and diagnostics, has faced mixed investor sentiment in recent months. Although the company continues to deliver steady growth through its companion animal segment and expanding international footprint, pockets of weakness in livestock-related markets and currency headwinds have pressured earnings expectations.
Argus’ adjustment comes as analysts across the Street maintain generally favorable views on Zoetis. The stock holds an average rating of Overweight, underscoring confidence in its long-term positioning. Investors are watching closely for updates on pipeline innovation and regulatory approvals, which could help reignite momentum.
Despite the reduced price target, Argus emphasized that Zoetis remains well capitalized and strategically focused, with an attractive portfolio that spans vaccines, parasiticides, and diagnostics. The firm sees upside potential as underlying demand trends in pet care normalize and input cost pressures begin to ease. Zoetis shares have been relatively stable year to date, reflecting the broader defensiveness of the animal health sector.
2. Alkermes plc (NASDAQ:ALKS)
TTM Operating Profit Margin: 35.84%
Average Analyst upside: 41.05%
Number of Hedge Fund Holders: 42
Alkermes plc (NASDAQ:ALKS) is one of the high-margin pharma stocks to buy now. Goldman Sachs has initiated coverage of Alkermes plc (NASDAQ:ALKS) with a Buy rating and a $43 price target, citing confidence in the company’s commercial execution and near-term clinical catalysts. The firm pointed to Alkermes’ established portfolio of neuroscience treatments, including Vivitrol and Aristada, as well-positioned to meet fiscal 2025 guidance, with revenue stability supporting broader investment in its development pipeline.
In its coverage note, Goldman highlighted the company’s progress in orexin receptor 2 agonist programs, which target sleep and neuropsychiatric disorders. These candidates, still in earlier stages of development, are expected to serve as a key driver of long-term value. The firm noted that upcoming data updates in this segment could serve as a meaningful stock catalyst and help reshape investor sentiment around Alkermes’ growth potential beyond its legacy assets.
Goldman also praised the company’s operational focus and recent steps to streamline costs and sharpen its R&D priorities. Alkermes’ strategic separation of its oncology assets last year has allowed management to concentrate resources on the neurology and psychiatry markets, where demand remains strong and innovation opportunities are expanding.
With shares trading well below the firm’s target, Goldman believes the current valuation offers an attractive entry point ahead of multiple data readouts and commercial milestones expected over the next 12 months.
1. Novo Nordisk A/S (NYSE:NVO)
TTM Operating Profit Margin: 48.43%
Average Analyst upside: 45,64%
Number of Hedge Fund Holders: 60
Novo Nordisk A/S (NYSE:NVO) is one of the high-margin pharma stocks to buy now. Berenberg has reaffirmed its Hold rating on Novo Nordisk A/S (NYSE:NVO), maintaining a price target of 610 Danish kroner, equivalent to roughly $88 per American Depositary Receipt (ADR), as investors await clarity on U.S. prescription trends for the company’s blockbuster weight-loss drug, Wegovy.
The firm is taking a measured stance ahead of Novo Nordisk’s second-quarter earnings report, scheduled for August 6. Analysts are focused on whether the recent wind-down of compounded semaglutide (the active ingredient in Ozempic and Wegovy) products in the U.S. has translated into stronger volume growth for Wegovy. So far, prescription trends appear to have plateaued quarter-over-quarter, raising questions about underlying demand momentum.
Attention is also centered on the implications of Novo Nordisk’s new pharmacy benefit partnership with CVS Caremark, which may influence pricing dynamics and reimbursement access. Analysts believe the company could revise its 2025 sales guidance, particularly if Wegovy uptake remains flat through the current quarter.
Berenberg’s cautious tone reflects broader market concerns around valuation and future growth visibility, even as Novo Nordisk continues to lead in the GLP-1 obesity treatment space. While long-term prospects for Wegovy and other pipeline assets remain strong, investors appear to be seeking more definitive signs of sustained prescription acceleration in the U.S. before re-rating the stock more aggressively.
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