11 Most Undervalued Pharma Stocks to Invest In

In this article, we will be taking a look at the 11 Most Undervalued Pharma Stocks to Invest In.

Haig Bathgate, CEO of Callanish Capital, stated on CNBC on May 7 that he is confident about global stocks despite worries over the Iran war. He clarified that while geopolitical crises typically cause short-term volatility motivated by emotional responses, their long-term effects on stocks have historically been minimal. According to him, investors frequently overreact during uncertain times and fail to recognize the fundamental factors that actually influence markets. He identified the main long-term drivers as capital expenditure cycles, global energy dynamics, and the quick development of artificial intelligence. In view of the continued momentum in U.S. stocks near the close of the previous year, he emphasized that while conflicts can temporarily disrupt some businesses, they do not alter the general direction of markets.

Speaking on CNBC’s “Closing Bell” on March 24, Scott Chronert of Citi provided a more nuanced viewpoint influenced by macroeconomic and geopolitical circumstances. He described two opposing stories that affect investor behavior. As tensions surrounding the Iran crisis increased over the previous three weeks, short-term positioning had become more defensive, and expectations for volatility had increased. Improved mood in stocks and other riskier assets, however, has been bolstered more recently by the reduction of hostilities. He emphasized how challenging the intermediate prediction is and how much it depends on problems with general liquidity, interest rates, oil prices, and currency volatility. As the fiscal Q1 earnings season approaches, these factors are expected to have a major influence on investment decisions and business fundamentals. While short-term relief rallies are possible, he stressed that longer-term direction ultimately depends on macroeconomic confirmation, structural growth, policy signals, and profitability trends.

When these perspectives are taken as a whole, they highlight the continuous conflict between long-term fundamental market dynamics and immediate geopolitical shocks. Investors’ major concerns continue to be earnings visibility, liquidity difficulties, and recurring themes like innovation, productivity growth, and the global energy shift, even while events like the Iran crisis can quickly affect sentiment and produce volatility. In this case, geopolitical events often influence timing and mood, but long-term market direction is still determined by fundamentals.

With that said, let’s take a look at the most undervalued stocks.

Our Methodology

For our methodology, we screened pharmaceutical stocks with a price-to-earnings (P/E) ratio of 20 or below. From this universe, we selected the top 11 stocks based on the latest news and recent developments, and then ranked them in descending order according to their P/E ratios.

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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).

Here is our list of the 11 most undervalued pharma stocks to invest in.

11. Pfizer Inc. (NYSE:PFE)

PE Ratio: 19.95

Pfizer Inc. (NYSE:PFE) is one of the most undervalued stocks on this list.

TheFly reported on May 27 that PFE and Innovent Biologics announced a global strategic licensing and collaboration agreement covering the research and development of 12 early-stage oncology programs, including antibody-drug conjugates and multi-specific antibody therapies. The alliance combines PFE’s global development and commercialization infrastructure with Innovent’s oncology discovery and early clinical expertise. The portfolio includes eight Innovent-originated and four Pfizer-originated programs, with select assets to be jointly developed and funded. Under the structure, Innovent will advance programs through Phase 1 before PFE assumes leadership for later-stage global development. Financial terms include a $650 million upfront payment to Innovent and potential milestone payments of up to $9.85 billion, plus tiered royalties and shared commercialization rights in key regions.

Separately, on May 20, Pfizer Inc. (NYSE:PFE) reported Phase 2 clinical data for its investigational 25-valent pneumococcal conjugate vaccine PF-07872412, evaluating safety, tolerability, and immune response in infants versus PREVNAR 20. The regimen followed a four-dose schedule at 2, 4, 6, and 12–15 months of age. Results showed strong immunogenic responses across all 25 serotypes, with notably higher antibody titers for key strains such as serotype 3 compared with the comparator vaccine. Safety outcomes were consistent with established pneumococcal vaccines, with similar local injection-site reactions and no new safety concerns. Based on these findings, PFE initiated a pivotal Phase 3 pediatric program in May 2026 to further evaluate efficacy and immunogenicity across a larger population.

Pfizer Inc. (NYSE:PFE) is a global biopharmaceutical company that develops medicines and vaccines. It focuses on key areas including oncology, immunology, internal medicine, and infectious diseases.

10. Sanofi (NASDAQ:SNY)

PE Ratio: 19.26

Sanofi (NASDAQ:SNY) is among the most undervalued stocks to invest in.

TheFly reported on May 27 that the US Food and Drug Administration (FDA) has granted priority review to SNY’s New Drug Application for venglustat, an investigational oral glucosylceramide synthase inhibitor intended for type 3 Gaucher disease, a rare lysosomal storage disorder with neurological involvement. If approved, the therapy would represent the first U.S. treatment targeting the progressive central nervous system manifestations of GD3.

The submission is supported by Phase 3 LEAP2MONO trial data in patients with stabilized systemic disease, where venglustat met its primary endpoints and most secondary endpoints. The treatment was generally well tolerated with no new safety concerns reported. The FDA has set a target action date of November 25, 2026, under its priority review designation for therapies addressing serious unmet medical needs.

Separately, on May 18, Sanofi (NASDAQ:SNY) reported positive results from its global Phase 2 ElevAATe study of efdoralprin alfa in adults with alpha-1 antitrypsin deficiency–related emphysema. The investigational therapy demonstrated superior performance versus standard augmentation treatment in restoring and maintaining normal functional alpha-1 antitrypsin levels, meeting the primary endpoint. Dosing every three weeks produced more than threefold higher mean trough increases compared with weekly plasma-derived therapy.

All key secondary endpoints were achieved, including sustained normalization of protein levels over the study period, with continuous coverage in the treatment arm versus substantially lower coverage under standard care. The safety profile was consistent with existing therapies, with no discontinuations due to.

Sanofi (NASDAQ:SNY) is a global biopharmaceutical company headquartered in Paris, France. It develops medicines and vaccines, with a strong focus on immunology, oncology, neurology, and rare diseases.

9. Gilead Sciences, Inc. (NASDAQ:GILD)

PE Ratio: 18.53

Gilead Sciences, Inc. (NASDAQ:GILD) is one of the most undervalued stocks to invest in.

TheFly reported on May  27 that GILD presented long-term interim findings from the ongoing Phase 3 ASSURE study of Livdelzi at the 2026 European Association for the Study of the Liver Congress in Barcelona. A post hoc analysis showed sustained improvement in liver function markers among patients with primary biliary cholangitis who had persistently elevated alkaline phosphatase despite prior first-line therapy.

Across treated participants, ALP levels declined, and a high proportion achieved biochemical normalization over extended follow-up, with durable responses observed up to two years. Additional analyses indicated stability in other indicators of cholestasis and liver stiffness over time. The safety profile remained consistent with earlier findings, with no treatment discontinuations due to adverse events and no new safety concerns identified.

In an interconnected pipeline development, Gilead Sciences, Inc. (NASDAQ:GILD) announced on May 22 that the European Medicines Agency’s CHMP issued a positive opinion recommending marketing authorization for Trodelvy (sacituzumab govitecan-hziy) as a first-line monotherapy option for adult patients with unresectable locally advanced or metastatic triple-negative breast cancer who are not eligible for PD-1 or PD-L1 inhibitor therapy.

The decision is based on Phase 3 ASCENT-03 results demonstrating statistically significant and clinically meaningful improvement in progression-free survival compared with standard chemotherapy, including a 38% reduction in the risk of disease progression or death. Metastatic TNBC remains a highly aggressive cancer with limited first-line options and poor outcomes. The recommendation now proceeds to the European Commission for final review, with a decision expected later in 2026.

Gilead Sciences, Inc. (NASDAQ:GILD) is a U.S. biopharmaceutical company focused on developing and commercializing innovative treatments for serious and life-threatening diseases worldwide.

8. GSK plc (NYSE:GSK)

PE Ratio: 13.45

GSK plc (NYSE:GSK) is one of the most undervalued stocks in the pharma sector.

TheFly reported on May 7 that GSK launched a public health awareness initiative under its Ask2BSure campaign, introducing Julie Bowen and Ty Burrell as campaign advocates to promote education around meningococcal disease, also known as meningitis. The effort encourages parents to better understand infection risks and discuss vaccination with healthcare providers.

The campaign includes an educational video titled The Mening-Itinerary, which illustrates everyday teen environments such as dorms, gyms, and social gatherings where bacterial transmission may occur. The content also highlights survivor experiences and aims to address gaps in parental awareness about disease risk and prevention. The initiative is designed to strengthen public understanding of meningitis and support informed vaccination decisions through storytelling and outreach.

Expanding its global commercial footprint, on May 11, GSK plc (NYSE:GSK) entered into an exclusive strategic collaboration with Sino Biopharmaceutical’s subsidiary Chia Tai Tianqing Pharmaceutical Group to accelerate the launch and commercialization of bepirovirsen in mainland China. Bepirovirsen is an investigational first-in-class therapy for chronic hepatitis B and is currently under priority regulatory review in China. The partnership combines GSK’s research and development capabilities with CTTQ’s established liver disease franchise and extensive hospital access network across thousands of medical centers.

Under the agreement, CTTQ will manage importation, distribution, and promotional activities in China, while GSK retains global regulatory, safety, and medical oversight responsibilities. The collaboration also includes potential evaluation of select early-stage assets for future partnership opportunities beyond China.

GSK plc (NYSE:GSK) is a global biopharma company headquartered in London. It develops medicines and vaccines, with a focus on infectious diseases, HIV, respiratory and immunology conditions, and oncology.

7. Zoetis Inc. (NYSE:ZTS) 

PE Ratio: 12.83

Zoetis Inc. (NYSE:ZTS) is among the most undervalued stocks to invest in.

TheFly reported on May 27 that Argus downgraded ZTS from Buy to Hold following a sharp decline in the company’s share price, including a steep one-day drop of about 22% and continued subsequent weakness. The move reflects growing investor concern over the company’s near-term growth outlook and reduced confidence in its performance trajectory. The analyst noted that recent price action signals a shift in market sentiment, with pressure on the stock driven by deteriorating expectations rather than a single operational event.

In addition to that, earlier on May 7, Zoetis Inc. (NYSE:ZTS) released its financial results for the first quarter of 2026, reporting revenue of $2.3 billion, which reflected a 3% increase compared with the same period in 2025 and was flat on an organic operational basis. Net income totaled $601 million, or $1.42 per diluted share, showing stable performance on a reported basis with 6% per-share growth. Adjusted net income reached $646 million, or $1.53 per diluted share, representing 2% and 9% increases on a reported basis and 1% and 7% growth on an organic operational basis.

The company noted a more challenging operating environment, including weaker veterinary visits and softer demand in companion animal products, alongside intensified competition. However, livestock and international segments delivered growth across cattle, poultry, swine, diagnostics, and parasiticides, partially offsetting U.S. declines and supporting overall portfolio resilience.

Zoetis Inc. (NYSE:ZTS) is a global animal health company that develops medicines, vaccines, and diagnostics for pets and livestock. Spun off from Pfizer in 2013, it serves veterinarians and farmers worldwide.

6. Prestige Consumer Healthcare Inc. (NYSE:PBH)

PE Ratio: 12.40

Prestige Consumer Healthcare Inc. (NYSE:PBH) is among the most undervalued stocks to invest in.

TheFly reported on May 15 that Canaccord Genuity cut its price target on PBH from $86 down to $72 while keeping a Buy rating in place. The adjustment came after a weaker Q4 result, driven largely by softness in the eye care segment along with additional pressure linked to the Iran conflict, prompting the firm to revise its model.

Separately, on May 13, Prestige Consumer Healthcare Inc. (NYSE:PBH) disclosed a definitive agreement to acquire LaCorium Health in an all-cash deal valued at about $150 million. The transaction is still subject to standard closing conditions and is expected to be completed during the second quarter of fiscal 2027. Based on financial data provided, LaCorium recorded roughly $40 million in revenue over the trailing twelve months ending February 28.

The business is projected to contribute around $12 million in EBITDA after the anticipated benefits from integration synergies are realized. In addition, LaCorium is expected to deliver double-digit net sales growth during calendar year 2026, indicating continued expansion before full integration. The acquisition is positioned as a strategic addition that will be incorporated into Prestige’s broader operations once finalized, strengthening its portfolio and supporting longer-term growth and profitability objectives within its consumer healthcare segment.

Prestige Consumer Healthcare Inc. (NYSE:PBH) is a leading provider of over-the-counter health, wellness, and personal care products. Headquartered in Tarrytown, New York, it manages a portfolio of well-known consumer health brands.

Click to continue reading and see the 5 Most Undervalued Pharma Stocks to Invest In.

Disclosure: None. Follow Insider Monkey on Google News.