7 Cheap Pharmaceutical Stocks to Buy According to Hedge Funds

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1. Zoetis Inc. (NYSE:ZTS)

Number of Hedge Fund Holders: 72

Forward PE Ratio: 18.08

Zoetis Inc. (NYSE:ZTS) tops our list for being one of the cheap pharmaceutical stocks.

TheFly reported on February 13 that Bank of America raised its price target for ZTS to $140 from $135 and maintained a Neutral rating on the shares. The upgraded target was supported by the company’s fiscal 2026 projection and fourth-quarter performance, which were mostly in line with expectations.

Zoetis Inc. (NYSE:ZTS) released its fourth-quarter 2025 financial results earlier on February 12 and reported that adjusted EPS of $1.48 was higher than the $1.40 consensus forecast. The company also reported that with a 3% year-over-year increase to $2.4 billion, the quarter’s sales showed strong growth in both the U.S. and international regions.

The corporation provided projections for fiscal year 2026 as well and predicted revenue of $9.83 billion to $10.03 billion and adjusted EPS of $7.00 to $7.10, surpassing analyst forecasts. Global operational gains, growth in important parasiticide and dermatology portfolios, and ongoing momentum in companion animal and cattle goods all support the expectation. These outcomes demonstrate ZTS’s capacity to produce steady growth and solidify its standing as a world leader in animal health.

Zoetis Inc. (NYSE:ZTS) is a global animal health company specializing in medicines, vaccines, and diagnostic products for livestock and companion animals, aiming to enhance animal health, productivity, and well-being worldwide.

While we acknowledge the potential of ZTS to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ZTS and that has 100x upside potential, check out our report about this cheapest AI stock.

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