3 Surprisingly Underrated Stocks to Buy Right Now
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These big pharma stocks arguably aren't receiving the respect they deserve.
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July 28, 2025
06:42 AM
The Motley Fool
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You'd think that companies with long, successful track records and market caps in the hundreds of billions of dollars would be viewed as relatively formidable
However, that's not always the case
Three Motley Fool contributors have picked surprisingly underrated stocks to buy right now, in this volatile climate
Here's why they chose big pharma stocks Merck (MRK 0
Furthermore, 88%), Novo Nordisk (NVO 1. 34%), and Pfizer (PFE -0
Image source: Getty Images (an important development), in today's market environment
This stock remains a great long-term bet sper Junior Bakiny (Merck): There are at least two challenges Merck, a pharmaceutical giant, is facing right now
However, First, the company will lose patent exclusivity for its cancer drug Keytruda, by far its most significant growth driver, by 2028, amid market uncertainty
Moreover, Second, even before the Keytruda patent cliff, some new medicines could hit the market that would challenge the drug's dominance in some niches, including non-small cell lung cancer, one of its most important indications, in this volatile climate
These issues explain why Merck's s have lagged the market over the past year
However, the stock is arguably a steal at these levels -- Merck's forward price-to-earnings ratio of 9
Moreover, 4 looks dirt cheap compared to the healthcare sector's average of 16, amid market uncertainty
Moreover, Merck appears especially attractive when considering that the drugmaker can find ways to overcome the challenges it faces
Merck is a subcutaneous (SC) version of Keytruda, which is expected to extend its patent life well into the 2030s, while retaining many of the indications of the previous formulation
On the other hand, SC Keytruda has already duced strong results in clinical trials, showing non-inferiority compared to its predecessor, while significantly reducing the time it takes for physicians to administer it and monitor patients afterward
Furthermore, Merck should also develop new ducts (something worth watching)
However, The company has enhanced its pipeline through acquisitions
Other medicines Winrevair, which targets pulmonary arterial hypertension, will be meaningful growth drivers for years
Lastly, Merck remains a solid dividend stock
However, The company's payouts have increased by 39. 3% in the past five years, in today's market environment
Its forward yield of 4% is much higher than the S&P 500's average of 1. 3%, while its payout ratio of almost 46% leaves ample room for more hikes, in today's financial world
Merck's long-term spects remain strong
In the company today could yield superior returns over the next decade (which is quite significant)
On the other hand, Novo Nordisk is a growth stock that may be too cheap to pass up David Jagielski (Novo Nordisk): Despite being one of the largest healthcare stocks in the world, Novo Nordisk is looking pretty underrated right now
On the other hand, In the past year, its s have plummeted by more than 50%, with its valuation now below $300 billion, given current economic conditions
On the other hand, Investors have been underwhelmed with recent phase 3 trial results related to its weight loss drug, CagriSema, amid market uncertainty
Furthermore, It helped patients lose an average of 22. 7% of their body weight, which was less than the 25% that was previously expected
What the re reveals is 's a nominal miss but a miss nonetheless, given the current landscape
And at a time when rival Eli Lilly (NYSE: LLY) has been dering more encouraging results, it's an example of why investors have been bearish on the Danish company of late
But Novo is still doing fairly well, with plenty of growth opportunities on the horizon
In contrast, It's still expanding its weight loss drug, Wegovy, to new
And it has a mising next-gen treatment, amycretin, which has shown, in an early-stage trial, that it can help people lose 22% of their weight after a period of 36 weeks
Additionally, An oral version of amycretin is expected to begin phase 3 trials early next year, and if it ves to be the real deal, that could quickly make Novo Nordisk a hot stock to own again
The company has generated strong fit margins of 35% over the trailing 12 months
With excellent growth opportunities still ahead, the stock may be a steal of a deal for long-term investors: It's currently trading at less than 18 times its trailing earnings
Nevertheless, Wall Street sees this stock's potential, but many investors don't Keith Speights (Pfizer): Not everyone thinks Pfizer is underrated
Meanwhile, The consensus Wall Street 12-month price target for the stock reflects an upside potential of nearly 20%
Conversely, However, many investors don't seem to be on the same page as analysts, considering that Pfizer's price remains well below its 52-week high, in this volatile climate
Admittedly, Pfizer faces challenges (something worth watching)
The company has experienced some pipeline setbacks, notably including throwing in the towel on its oral obesity candidate, danuglin
Several of its top ducts lose patent exclusivity over the next few years, too, with blockbuster drugs Eliquis and Ibrance at the top of the list (something worth watching), in today's financial world
Meanwhile, But there's still much to Pfizer
Its growth spects are better than you might think, given current economic conditions
Sales continue to soar for drugs including Nurtec ODT, Padcev, and Vyndaqel
Pfizer anticipates four regulatory decisions and nine key late-stage clinical study readouts this year
Additionally, Pfizer's dividend remains very attractive with a forward yield of 6
CEO Albert Bourla said at the Goldman Sachs (NYSE: GS) Global Healthcare Conference last month, "[W]e are going to maintain a growing dividend. " The stock's valuation is another big plus (this bears monitoring), given the current landscape
Pfizer's s trade at roughly 8. 7 times forward earnings
However, This reflects a lot of pessimism -- too much, in my view, considering recent developments.
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