3 Large Drug Stocks to Watch as the Industry Shows Some Recovery

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• Mounjaro and Zepbound are expected to continue to see strong demand in 2026.

  80% confidence

• M&A activity has shot up in pharma after remaining muted in the first half of 2025.

  80% confidence

• J&J's 2026 EPS consensus estimate rose from $11.38 to $11.48 per share over the past 60 days.

  80% confidence

• Eli Lilly has a Zacks Rank #3 (Hold).

  80% confidence

• The Zacks Large Cap Pharmaceuticals industry currently carries a Zacks Industry Rank #185, placing it in the bottom 24% of 243 Zacks industries.

  80% confidence

• An oral pill like orforglipron has the potential to be a more convenient alternative to popular injectable treatments like Zepbound and Wegovy.

  80% confidence

• J&J's Innovative Medicine segment sales rose 3.4% in the first nine months of 2025 on an organic basis despite Stelara LOE.

  80% confidence

• Eli Lilly plans to file regulatory applications for orforglipron in obesity later in 2025, setting up a potential launch in 2026.

  80% confidence

• The Large Cap Pharma industry has risen 15.6% year to date, outpacing the Zacks Medical Sector's 6.3% but underperforming the S&P 500's 18.5%.

  80% confidence

• Over the last five years, the Large Cap Pharma industry has traded at a high of 20.80X P/E, a low of 13.09X, and a median of 15.99X.

  80% confidence

• Eli Lilly, Johnson & Johnson and Sanofi are worth retaining in one's portfolio among large drugmakers.

  80% confidence

• The drug and biotech sector has recovered in the past couple of months after remaining muted for most of this year.

  80% confidence

• Sanofi's 2026 EPS consensus estimate declined from $4.96 to $4.89 per share over the past 60 days.

  80% confidence

• The Large Cap Pharma industry trades at a forward 12-month P/E of 16.91X, below the S&P 500's 23.44X and the Zacks Medical Sector's 20.99X.

  80% confidence

• Johnson & Johnson has a Zacks Rank #3.

  80% confidence

• J&J looks quite confident that it will be able to navigate headwinds including weak MedTech sales in China, the Stelara patent cliff, Part D redesign impact, and talc lawsuits.

  80% confidence

• The top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

  80% confidence

• Sanofi has a Zacks Rank #3.

  80% confidence

• Eli Lilly's 2026 earnings estimates improved from $30.84 to $33.36 per share in the past 60 days.

  80% confidence

• Sanofi's Vaccines unit has delivered mid-to-high-single-digit sales growth since 2018.

  80% confidence