Still, many are reluctant to sound an all-clear on the industry, which is trading close to its biggest-ever valuation gap against the S&P 500 based on forward price-to-earnings ratios, according to Refinitiv Datastream.
“That is an area where you can quickly get to some sort of bipartisan agreement,” said Les Funtleyder, a healthcare portfolio manager at E Squared Capital. “Big pharma names have underperformed, and look cheap relative to historical valuations and the market overall,” said Jim Shanahan, an Edward Jones analyst who covers Berkshire. “These are large, dominant companies in an industry that has demonstrated strong, long-term growth.”Investors say pharma stocks have also lagged because many top-selling products are slated to lose patent protection in the coming years, including Abbvie’s blockbuster Humira.