Best Healthcare Stocks To Buy In May

Key Insights

• Pfizer and Merck are moving higher amid rising demand for safe-haven assets, which is bullish for leading healthcare stocks. 
• Both companies are trading at attractive valuation levels. 
• Analyst estimates for Merck have recently moved higher and pushed the stock to all-time high levels. 

Investors continue to search for potential safe-haven assets as S&P 500 is trading close to yearly lows. In this environment, healthcare stocks may get additional support. In fact, some healthcare stocks, like Pfizer, have recently gained upside momentum.

Pfizer

Pfizer stock has recently managed to settle back above the $50 level and developed strong upside momentum. The company is expected to report earnings of $6.79 per share in the current year and earnings of $5.33 per share in the next year, sot the stock is trading at 10 forward P/E.

Earnings estimates have been moving lower in recent weeks, which is typically bearish for the stock. However, Pfizer’s attractive valuation and rising demand for safe-haven assets have served as positive catalysts for the company’s shares. In case demand for safe-haven assets remains strong, Pfizer stock will likely move higher.

Merck

Merck is another example of a healthcare stock that is moving higher due to attractive valuation and rising demand for safe-haven assets.

At the end of April, the company released its quarterly report, which served as a bullish catalyst for the stock. Merck reported revenue of $15.9 billion and adjusted earnings of $2.14 per share, easily beating analyst estimates on both earnings and revenue.

Currently, the stock is trading at roughly 13 forward P/E. It should be noted that analyst estimates have been moving higher in recent weeks, which provided additional support to Merck stock.  The company’s shares have recently tested all-time high levels, and it looks that Merck stock has a good chance to continue the current trend.

To keep up with the latest earnings updates, visit our earnings calendar.