In this article, we will be taking a look at the 9 Most Undervalued Pharma Stocks to Buy Right Now.
The U.S. pharmaceutical industry in 2025 remains one of the nation’s most dynamic and profitable economic sectors. Valued between $520 billion and $720 billion this year, the industry commands roughly 42% of the global pharmaceutical market, according to Precedence Research and Nova One Advisor.
It is estimated that the market of Personalized Medicine in the United States will skyrocket to $307.04 billion by 2033, out of $169.56 billion in 2024, with a CAGR of 6.82% between 2025 and 2033. Angular transactions in next-generation sequencing, increased demand for customized treatments, and government support of relevant policies are among the major growth factors. Drug diagnostics and treatment are being made more accurate due to the introduction of technologies such as AI and machine learning, transforming personalized care. The market has issues such as expensive development and low levels of clinical standardization.
In the second term of his presidency, President Donald Trump has introduced a series of changes affecting drug pricing, manufacturing in America, and the pharmaceutical trade balance. In 2025, a 100% tariff on imported brand drugs was declared, which motivated companies to move production to the U.S. under a Build It Here requirement.
The White House also introduced the TrumpRx.gov platform and Most-Favored-Nation (MFN) pricing orders to pressure firms into aligning domestic prices with those in other advanced economies. These policies, paired with regulatory reforms streamlining approvals for generics and biosimilars, mark a decisive shift toward pharmaceutical self-reliance and cost containment.
The mood of analysts about the prospects of the U.S. pharmaceutical market is optimistic but with reservations. The Boston Consulting Group cautions about the impending so-called patent cliff that might wipe out $350 billion in yearly revenues in the global market as medications such as Keytruda and Eliquis lose their exclusivity, but anticipates further expansion with investments in biologics, gene therapies, and AI-based research and development.
Deloitte and PwC also forecast more innovation and acquisitions as pharmaceutical firms shift to digital technology and seek additional therapy breakthroughs. According to S&P Global Ratings, the credit perspective of the sector is stable, as the revenue streams and the cash reserves counter the pressure on pricing and regulatory value.
With that being said, let’s now look at the most undervalued pharma stocks you could buy right now.
Our Methodology
For our methodology, we first screened pharmaceutical stocks using a stock screener, applying filters that included a forward P/E ratio between 8 and 18 and a positive price target upside. From the resulting list, we selected the top 11 stocks with the lowest P/E ratios and ranked them accordingly. Each stock’s upside potential, calculated as of December 13, is also highlighted in the subheadings.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Here is our list of the 9 most undervalued pharma stocks to buy right now.
9. AbbVie Inc. (NYSE:ABBV)
Forward P/E Ratio: 15.95
Price Target Upside: 11.95%
AbbVie Inc. (NYSE:ABBV) is among the most undervalued stocks.
TheFly reported on December 15 that Bank of America (BofA) lowered its price target for ABBV to $233 from $248 while maintaining a Neutral rating, reflecting a modestly reduced valuation outlook even as the company’s core business fundamentals remain solid.
On December 10, HSBC also raised its rating on ABBV from Hold to Buy and increased its price target to $265, signaling greater confidence in ABBV’s growth prospects.
The divergent analyst perspectives relate in part to AbbVie Inc. (NYSE:ABBV)’s ongoing transition away from Humira toward newer immunology products Skyrizi and Rinvoq. These drugs have been strong revenue drivers in 2025. According to recent reporting, Skyrizi and Rinvoq together generated about $18.5 billion in sales in the first nine months of 2025.
AbbVie Inc. (NYSE:ABBV) is a global biopharmaceutical company that discovers, develops, manufactures, and sells a diverse portfolio of advanced therapies. It is a major player in the immunology, oncology, neuroscience, and aesthetics markets.
8. Novo Nordisk A/S (NYSE:NVO)
Forward P/E Ratio: 13.74
Price Target Upside: 19.69%
Novo Nordisk A/S (NYSE:NVO) is among the most undervalued stocks.
On December 15, 2025, UBS reaffirmed its Neutral (Hold) rating on NVO with an unchanged price target of DKK 295, reflecting a cautious view on the stock amid competitive pressures and mixed industry dynamics. UBS’s rating and target were reiterated in recent analyst research, with the Neutral outlook suggesting neither strong upside nor a compelling near‑term buy signal.
A key recent development supporting Novo Nordisk A/S (NYSE:NVO)’s growth strategy occurred on December 12, 2025, when the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending EU approval of a higher 7.2 mg dose of Wegovy (semaglutide). This higher dose demonstrated significantly greater average weight loss in clinical trials compared to the currently approved 2.4 mg dose and, if formally approved by the European Commission, could become available in early 2026.
The higher Wegovy dosage is also under regulatory review in the U.S., U.K., and other regions, with NVO having submitted the filing in the U.S. and receiving an expedited review designation.
Novo Nordisk A/S (NYSE:NVO) is a Danish multinational pharmaceutical company. It is a world leader in diabetes and obesity care, producing approximately half of the world’s insulin.
7. Biogen Inc. (NASDAQ:BIIB)
Forward P/E Ratio: 11.14
Price Target Upside: 0.52%
Biogen Inc. (NASDAQ:BIIB) is one of the most undervalued stocks.
On December 10, TheFly reported that HSBC downgraded BIIB from Hold to Reduce, and lowered its price target to $143, citing concerns that BIIB’s reliance on royalty streams and challenges in its core business could weigh on future earnings and growth. HSBC’s analysis highlighted margin pressure from declining royalty revenue and limited near-term earnings improvement potential, despite other progress at the company.
Despite this downgrade, Biogen Inc. (NASDAQ:BIIB) has reported a series of recent operational and clinical developments: LEQEMBI (lecanemab), the company’s Alzheimer’s disease therapy developed with Eisai, was included in China’s new Commercial Insurance Innovative Drug List on December 8, which is expected to expand market access and potential patient coverage starting January 1, 2026.
Eisai and BIIB have presented data at scientific meetings such as CTAD 2025 on December 3, demonstrating continued benefits of LEQEMBI maintenance treatment in early Alzheimer’s disease, supporting its clinical value.
Biogen Inc. (NASDAQ:BIIB) and Stoke Therapeutics presented long-term data for zorevunersen on December 5, an investigational treatment for Dravet syndrome, showing durable seizure reductions, highlighting the business’s progress in rare neurological disorders.
According to HSBC, while BIIB has reported clinical and market access progress on several therapies, these advances may not be sufficient on their own to fully counteract broader structural challenges, particularly expected declines in royalty streams and pressure on legacy revenue drivers, which could constrain earnings growth and margin expansion relative to expectations.
Biogen Inc. (NASDAQ:BIIB) is a leading American multinational biotechnology company with a foundational focus on pioneering treatments for complex and devastating neurological and neurodegenerative diseases.
6. Lantheus Holdings, Inc. (NASDAQ:LNTH)
Forward P/E Ratio: 11.04
Price Target Upside: 17.83%
Lantheus Holdings, Inc. (NASDAQ:LNTH) is among the most undervalued stocks.
On December 11, TheFly reported that Truist Securities upgraded LNTH from Hold to Buy and raised its price target to $80, reflecting a more optimistic view of the company’s growth prospects and belief that the current valuation underrates future revenue and earnings potential.
The upgrade reflected expected profit re-acceleration into late 2025 and beyond and was supported by LNTH’s strong financial performance and strategic positioning relative to industry peers.
This positive view is connected to Lantheus Holdings, Inc. (NASDAQ:LNTH)’s third-quarter 2025 results released on November 6th, in which the company reported $384 million in revenue, adjusted EPS of $1.27, and $94.7 million in free cash flow, despite some pressure on its core PYLARIFY franchise.
Lantheus Holdings, Inc. (NASDAQ: LNTH) is a leading radiopharmaceutical-focused company dedicated to providing innovative diagnostic and therapeutic products to improve patient outcomes.
5. Merck & Co., Inc. (NYSE:MRK)
Forward P/E Ratio: 10.67
Price Target Upside: 4.69%
Merck & Co., Inc. (NYSE:MRK) is among the most undervalued stocks.
On December 12, 2025, Morgan Stanley analyst Terence Flynn reiterated an Equal Weight rating on MRK and raised the price target from $100 to $102 in a research note to investors.
On the same day, the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending an expanded indication for MRK’s WINREVAIR (sotatercept) for adults with Pulmonary Arterial Hypertension (PAH) covering WHO Functional Classes II–IV. This recommendation will now be reviewed by the European Commission, with a final decision expected in the first quarter of 2026.
Earlier on December 10, 2025, TheFly reported that HSBC analyst Rajesh Kumar reiterated a Buy rating on Merck & Co., Inc. (NYSE:MRK) and raised the price target to $120
In addition, MRK’s Animal Health segment received conditional approval from the U.S. Food and Drug Administration (FDA) in early December 2025 for EXZOLT CATTLE‑CA1, a pour‑on parasiticide formulation effective against cattle infestations.
Merck & Co., Inc. (NYSE:MRK) is a global health care company that delivers innovative health solutions through its prescription medicines, vaccines, biologic therapies, and animal health products.
4. Teva Pharmaceuticals Industries Limited (NYSE:TEVA)
Forward P/E Ratio: 10.49
Price Target Upside: 2.89%
Teva Pharmaceuticals Industries Limited (NYSE:TEVA) is one of the most undervalued stocks on our list.
TheFly reported on December 9 that Bank of America Securities analyst Jason Gerberry reaffirmed a Buy rating on TEVA and raised his price target to $32.00, reflecting conviction that the stock remains undervalued relative to its improving revenue trajectory and debt reduction progress.
Also on December 9, 2025, Barclays analyst Glen Santangelo initiated coverage of TEVA with an Overweight rating and a $35.00 price target, signaling further Wall Street confidence in Teva’s branded growth drivers and overall strategic progress.
These analyst moves come amid significant pipeline advancement for Teva Pharmaceuticals Industries Limited (NYSE:TEVA). On December 9, 2025, TEVA submitted a New Drug Application (NDA) to the U.S. FDA for olanzapine long-acting injectable (LAI) for schizophrenia, based on positive Phase 3 SOLARIS trial data supporting its efficacy and safety as a once-monthly subcutaneous formulation. If approved, this asset would expand the company’s branded neuroscience franchise alongside its existing UZEDY (risperidone LAI).
Teva Pharmaceuticals Industries Limited (NYSE:TEVA) is a global leader in the pharmaceutical industry, best known for its robust generics business, which is complemented by a growing portfolio of specialty and innovative medicines.
3. Sanofi (NASDAQ:SNY)
Forward P/E Ratio: 9.80
Price Target Upside: 25.31%
Sanofi (NASDAQ:SNY) is among the most undervalued stocks.
Between December 8 and December 10, 2025, SNY faced a series of analyst rating adjustments that tempered investor sentiment. The Fly reported on Monday, December 8, 2025, that J.P. Morgan downgraded SNY from Overweight to Neutral, signaling a more cautious near-term outlook for the company.
The following day, Guggenheim lowered its rating from Buy to Neutral, marking a second downgrade in less than 48 hours. On Wednesday, December 10, 2025, HSBC trimmed its price target from EUR 102 to EUR 100 while maintaining its Buy rating, further contributing to market caution.
These analyst actions reflect reduced optimism about Sanofi (NASDAQ:SNY)’s near-term growth prospects and potential catalysts. While the downgrades occurred in close succession, the analysts’ published notes focused primarily on valuation considerations and limited near-term pipeline catalysts, rather than any confirmed regulatory setbacks.
Separately, market observers reported that U.S. regulators launched renewed safety scrutiny of approved infant RSV therapies, including SNY’s Beyfortus, following inquiries into safety data. This review is ongoing and does not constitute an official safety finding, but it highlights a level of regulatory attention that could influence investor sentiment.
Sanofi (NASDAQ:SNY) is a global healthcare company engaged in the research, development, manufacture, and marketing of therapeutic solutions across pharmaceuticals, vaccines, and consumer healthcare.
2. Bristol-Myers Squibb Company (NYSE:BMY)
Forward P/E Ratio: 8.67
Price Target Upside: 1.13%
Bristol-Myers Squibb Company (NYSE:BMY) is one of the most undervalued stocks on our list.
On Friday, December 12, 2025, TheFly reported that Guggenheim upgraded BMY’s stock rating from Neutral to Buy and set a new price target of $62, reflecting growing confidence in the company’s valuation and future growth prospects.
The upgrade followed a key regulatory development on Thursday, December 11, 2025, when the U.S. Food and Drug Administration granted Priority Review to Bristol-Myers Squibb Company (NYSE:BMY)’s supplemental biologics license application for Opdivo (nivolumab) in combination with chemotherapy (AVD) for the treatment of classical Hodgkin lymphoma. Priority Review accelerates the potential approval timeline compared with a standard review, shortening the path to market for this new indication.
Analysts at Guggenheim cited this regulatory acceleration and the strength of BMY’s broader pipeline as important catalysts that could expand Opdivo’s revenue potential and improve long‑term earnings prospects, contributing to the decision to adopt a more bullish Buy rating.
Bristol-Myers Squibb Company (NYSE:BMY) is a multinational biopharmaceutical company that focuses on discovering, developing, and delivering innovative medicines for patients with serious diseases, particularly in the areas of oncology, hematology, immunology, and cardiovascular disease.
1. Pfizer Inc. (NYSE:PFE)
Forward P/E Ratio: 8.53
Price Target Upside: 12.19%
Pfizer Inc (NYSE:PFE) tops our list for being one of the most undervalued pharmaceutical stocks.
On Friday, December 12, 2025, The Fly reported that Morgan Stanley maintained its Hold (Equal‑Weight) rating on PFE., while lowering the price target to $28 from a prior estimate of $32. The move reflects a neutral outlook on the company’s near-term valuation and growth prospects amid ongoing market pressures.
The rating followed Pfizer Inc (NYSE:PFE)’s announcement on Wednesday, December 10, 2025, of positive Phase 3 clinical results for its drug TUKYSA (tucatinib). The data showed that adding TUKYSA to first-line maintenance therapy extended median progression-free survival by over eight months in patients with HER2-positive metastatic breast cancer. Acquired through PFE’s Seagen acquisition, TUKYSA highlights the value of the company’s pipeline and acquired assets in offsetting declining COVID-19-related revenues.
Pfizer Inc (NYSE:PFE) is a massive American multinational pharmaceutical and biotechnology corporation. It is known for developing and producing medicines and vaccines for a wide range of medical disciplines, including immunology, oncology, cardiology, endocrinology, and neurology.
While we acknowledge the potential of PFE 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 PFE and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. 9 Most Undervalued Pharma Stocks to Buy Right Now is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
