When Wall Street analysts decide to come out of their caves and boost a certain stock, retail investors should pay attention to the motives behind the decision as it can signal a shift in sentiment toward an entire sector.
That’s exactly what happened when J.P. Morgan recently upgraded Gilead Sciences Inc. (NASDAQ:GILD), highlighting renewed confidence in the healthcare space.
This move suggests that, amid all of the volatility in the S&P 500 index, the medical sector deserves Wall Street’s attention as a safe haven filled with potentially undervalued opportunities. Investors should look closely at how stocks in this sector are performing relative to the broader market, especially during periods of heightened volatility.
One such stock is Pfizer Inc. (NYSE:PFE), which has mirrored Gilead’s recent stability and offers a fundamentally sound, defensive position with room for upside.
For investors seeking a bolder, contrarian play, Hims & Hers Health Inc. presents a compelling risk-reward setup and stands out as a growth-focused name that could benefit from broader strength in the sector.
1. What Analysts See in Gilead Stock
For starters, Gilead has delivered standout performance, beating the S&P 500 by as much as 27% over the past quarter—especially impressive during recent spikes in volatility and sharp declines. As the stock now trades at 93% of its 52-week high, it has caught the attention of major institutions.
JPMorgan’s Overweight rating marks a pivotal endorsement for Gilead, signaling renewed optimism in the company’s valuation and the broader healthcare sector. According to JPMorgan, Gilead’s current fundamentals and technical strength justify further institutional interest and position it as a standout opportunity amid market volatility.
Reinforcing JP Morgan’s bullish stance, decided to join the $6.5 billion of institutional investors over the past quarter, increasing its holdings by as much as 30.1%. This move brought UBS’s total position to $801.6 million, signaling strong conviction from one of the world’s largest asset managers.
Analysts believe Gilead could climb to a new 52-week high near $130, representing a potential 16.1% upside from current levels. For investors looking for strength and stability in today’s uncertain market, Gilead appears to be leading the charge within healthcare.
2. Pfizer: An Earnings-Driven Opportunity
If Gilead represents momentum and institutional conviction, then Pfizer stands out as a value-based, defensive opportunity that still offers upside. Like Gilead, Pfizer has shown resilience in a volatile market and now trades at 80% of its 52-week high.
While it may not carry the same short-term momentum as Gilead, Pfizer is quietly supported by strong fundamentals, particularly improving earnings projections. Analysts now see up to $1.00 in Pfizer’s third-quarter EPS, a significant 51.5% increase from today’s reported 66-cent EPS. That outlook might also explain the current analyst consensus price target of $31.92, implying a potential 25.9% upside from today’s levels.
Beyond earnings, Pfizer offers an income advantage: a 6.8% annual dividend yield based on its $1.72 per share payout. In today’s inflationary environment, that yield not only protects against purchasing power erosion but also provides a cushion against continued volatility in the S&P 500. For investors seeking both stability and modest growth, Pfizer is a compelling complement to more aggressive sector bets.
3. Hims & Hers: A Contrarian Play With High Upside
For investors willing to embrace more risk for potentially higher reward, Hims Hers Health Inc (NYSE:HIMS) offers a distinctly different—but timely—opportunity in the healthcare space. While Gilead and Pfizer appeal to more conservative or income-seeking portfolios, Hims & Hers presents a contrarian growth play supported by improving fundamentals and growing institutional interest.
$739 million of institutional capital made its way to Hims & Hers tock over the past quarter, as this stock could benefit from the same tailwinds JPMorgan analysts spotted when they boosted Gilead stock.
The stock currently trades at just 38% of its 52-week high, making it one of the sector’s notable laggards. A recovery back to its 52-week high of $73 per share would represent a massive 147% upside from current prices.
However, that potential comes at a premium. Hims & Hers trades at a 66.1x P/E ratio, far above the sector average of 23.6x. But markets often assign such premiums to companies expected to outperform in the future—and HIMS has positioned itself as a disruptor in consumer-focused digital healthcare.