Stocks in the healthcare sector are preferred by many investors, given the resilient demand for the products and services offered by the companies in this space. Moreover, governments and companies are making significant investments to develop drugs targeting unmet medical needs. With this backdrop in mind, using TipRanks’ Stock Comparison Tool, we placed Eli Lilly (LLY), Abbott Laboratories (ABT), and Intuitive Surgical (ISRG) against each other to pick the healthcare stock with the highest upside potential, according to analysts.
Stay Ahead of the Market:
- Discover outperforming stocks and invest smarter with Top Smart Score Stocks
- Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener
Eli Lilly (NYSE:LLY)
Pharma giant Eli Lilly is focused on therapeutic areas like diabetes, oncology, immunology, and neurodegeneration. However, the company has been mainly gaining attention for its Type-2 diabetes drug Mounjaro and weight loss medication Zepbound.
While Q3 results fell short of expectations and the company lowered its full-year adjusted profit guidance, the demand for these blockbuster drugs remains strong. Eli Lilly has been making significant investments to boost the production of these drugs.
Aside from meeting the robust demand for its glucagon-like peptide-1 (GLP-1) receptor agonist drugs, such as Mounjaro and Zepbound, the company is also focused on capturing opportunities across other therapeutic areas. Moreover, it is optimistic about approvals of these two drugs for other indications. Remarkably, Zepbound recently won the U.S. Food and Drug Administration’s (FDA) approval for moderate-to-severe obstructive sleep apnea in adults with obesity.
Is Eli Lilly a Buy, Sell, or Hold?
Recently, JPMorgan analyst Chris Schott reiterated a Buy rating on Eli Lilly stock with a price target of $1,100. Despite expectations of Eli Lilly arriving at the lower end of the Q4 2024 guidance, Schott is optimistic about the company’s prospects in 2025 and beyond. He expects growth to be driven by higher sales from Mounjaro and Zepbound, fueled by increased supply, a rise in promotional activities, and broader label coverage for Zepbound.
Overall, Wall Street has a Strong Buy consensus rating on Eli Lilly stock based on 15 Buys and two Hold ratings. The average LLY stock price target of $1,050.79 implies 37.3% upside potential. Shares have risen 24% over the past year. LLY stock offers a dividend yield of 0.67%.
Abbott Laboratories (NYSE:ABT)
Healthcare company Abbott Laboratories has a diversified presence across diagnostics, medical devices, nutrition, and branded generic pharmaceuticals. After facing a setback during the pandemic, the company’s key division, Medical Devices, has been rebounding well and delivered about a 12% revenue growth in Q3 2024. It offset the weakness in the Nutrition and Diagnostics businesses.
Looking ahead, Abbott is optimistic about its diversified business model and new products. Notably, it is upbeat about Lingo, a continuous glucose monitoring system available without a prescription, which was launched in the U.S. in September 2024.
Is ABT a Good Stock to Buy?
Last month, TD Cowen analyst Josh Jennings reiterated a Buy rating on ABT stock and increased the price target to $135 from $130. The analyst believes that there are multiple tailwinds that can help the company sustain continued growth in 2025. He added that the revised price target reflects a P/E (price-to-earnings) multiple of 23.5 times the 2026 EPS estimate of $5.75.
The analyst noted that at the Transcatheter Cardiovascular Therapeutics (TCT) conference held in October 2024, Abbott reviewed its Structural Heart business and gave favorable information on the company’s TriClip, Navitor, and Amulet offerings, which are all gaining market share in the domestic market. The analyst is optimistic that these products can supplement MitraClip’s growth and help drive double-digit growth for the overall business.
Among the other growth drivers, Jennings highlighted the Libre franchise and the company’s solid product pipeline. Jennings noted that the company is comfortable with Wall Street’s 2025 sales and EPS growth estimates of 7% and 10%, respectively.
With 17 Buys and three Holds, Wall Street has a Strong Buy consensus rating on Abbott Laboratories stock. The average ABT stock price target of $134.06 implies about 19% upside potential. Shares have risen by only 2% over the past year. ABT stock offers a dividend yield of 1.95%.
Intuitive Surgical (NASDAQ:ISRG)
Intuitive Surgical is a dominant player in the minimally invasive and robotic-assisted surgery space. The company is mainly known for its da Vinci Surgical System. ISRG shares have rallied 68% over the past year, thanks to the increased adoption of the company’s da Vinci systems. As of the end of Q3 2024, the da Vinci surgical system’s installed base expanded by 15% year-over-year to 9,539 systems.
It is worth noting that a substantial portion of the company’s revenue is recurring in nature and includes instruments and accessories revenue, service revenue, and operating lease revenue. Specifically, recurring revenue accounted for 86% of ISRG’s total revenue in the first nine months of 2024.
Intuitive Surgical is scheduled to announce its fourth-quarter results on January 23, 2025. The analyst expects the company’s adjusted EPS to increase by more than 9% to $1.75 in Q4 2024 and revenue to rise 14.3% to $2.20 billion. ISRG has exceeded analysts’ estimates for seven consecutive quarters.
Is Intuitive Surgical a Good Investment?
In a research note on the MedTech sector’s prospects in 2025, Bank of America (BofA) stated that Intuitive Surgical and Boston Scientific (BSX) remain its top picks for the third consecutive year. Analysts at Bank of America noted that both these companies delivered solid EPS growth in 2024. While the two companies might lack similar tailwinds for valuation growth in 2025 compared to last year, their consistent top-line growth and EPS upside might continue to make them attractive.
Specifically, BofA analysts view Intuitive Surgical as a leader in surgical robotics, with its da Vinci system well-positioned for further growth through technological advancements and broader geographic adoption.
Overall, ISRG earns a Strong Buy consensus rating based on 16 Buys and four Hold recommendations. At $570, the average ISRG stock price target implies 5.1% upside potential.
Conclusion
Wall Street is optimistic about the long-term prospects of Eli Lilly, Abbott Laboratories, and Intuitive Surgical. However, analysts see higher upside potential in Eli Lilly compared to the other two healthcare stocks. Analysts are optimistic about Eli Lilly due to the substantial demand for its GLP-1 drugs, Mounjaro and Zepbound, and opportunities across other key therapeutic areas.
