Laying out their case, the bank\u2019s US equity team writes, \u201cWhile we of course have exposure to the theme of Artificial Intelligence<\/a>\u2026 the drivers for the broader list are more diverse\u2026 For the broader market, our US Equity Strategist, Savita Subramanian says there is \u2018no way to sugar coat it \u2013 the S&P 500 is expensive.\u2019 However, as the saying goes there is always a bull market somewhere and Savita highlights Health Care\u2026 screen[s] attractive near-term.\u201d<\/p>\n So, let\u2019s take a look at a couple of BofA\u2019s healthcare choices. While they are quite different companies, from different facets of the healthcare industry, both feature Buy ratings on Wall Street and double-digit upside potentials. Here are the details.<\/p>\n Vertex Pharmaceuticals (VRTX)<\/p>\n Vertex, the first stock Bank of America healthcare pick we\u2019ll look at, is a biopharma company with a strong portfolio of approved, commercialized medications, along with an extensive portfolio of new drug candidates at all levels of development. Vertex boasts that it dedicates upwards of 70% of its operating expenses, and some 3\/5 of its workforce, to R&D activities.<\/p>\n This is a golden combination for a biopharmaceutical research firm, giving the company a sound base of revenue-generating products and a pipeline of future products with potential to expand that base. Currently, the largest revenue generator among Vertex\u2019s approved products is Trikafta, a treatment for the lung disease cystic fibrosis. Trikafta has been on the market since 2019 for patients ages 12 and up; in 3Q25, the last period reported, it brought in $2.65 billion in revenue for the company. This was approximately 85% of Vertex\u2019s quarterly revenue in the period. The company\u2019s second leading product, Alyftrek, was approved in 2024 for CF patients ages 6 and up. Alyftrek sales generated $247 million for Vertex in Q3 last year.<\/p>\n The company\u2019s total revenue in Q3 came to $3.08 billion, and marked an 11% increase year-over-year. The Q3 revenue beat the forecast by $20 million. The company\u2019s earnings figure in Q3, the non-GAAP EPS of $4.80, was up 42 cents per share year-over-year and was 22 cents per share better than had been expected.<\/p>\n Shares in Vertex are up more than 11% over the past 12 months, lagging the broader markets. We should note that, in the summer of last year, the stock took a hard hit when it removed the drug candidate VX-993 from its pipeline, following the failure of a clinical study to meet endpoint goals. The stock has still not fully recovered from that hit.<\/p>\n Looking ahead for Vertex, one key factor seems to be povetacicept, a drug candidate under development for the treatment of both IgA nephropathy and primary membranous nephropathy in adult patients. This past November, the company announced positive data from the Phase 1\/2 RUBY-3 study, showing statistically significant improvements for patients. These results support Vertex\u2019s Biologics License Application process for povetacicept, while the full enrollment has been completed for the Phase 3 RAINIER clinical trial in IgA nephropathy. On the primary membranous nephropathy track, the drug has been granted Fast Track Designation by the FDA, and a Phase 2\/3 pivotal trial has been initiated.<\/p>\n Bank of America\u2019s Tazeen Ahmad has focused on povetacicept as the key support for her upbeat view of VRTX shares, writing, \u201cNear-term, we are focused on the phase 3 readout for povetacicept in IgA nephropathy (IgAN), which we see as the key catalyst for the year. We highlight the company announced in May 2025 that the cohort for the 36-week interim analysis had completed enrollment, so we expect the data update could come in 1Q26. VRTX already initiated the rolling submission to file for accelerated approval, which is expected to complete in 1H26. We think povetacicept has best-in-class potential in IgAN based on early data and the differentiated dosing profile. We see potential for upside from positive results from the interim readout of the phase 3 RAINIER trial providing further validation of prior data. IgAN represents an attractive commercial opportunity with ~300K patients in US and EU, and VRTX has further to expand povetacicept into other indications like primary membranous nephropathy (pMN) and generalized myasthenia gravis (gMG).\u201d<\/p>\n Ahmad goes on to put a Buy rating on VRTX shares, along with a $571 price target that implies a 12-month upside potential of 27%. (To watch Ahmad\u2019s track record, click here<\/a>.)<\/p>\n There are 22 recent analyst reviews here, and their split \u2013 16 Buys to 6 Holds \u2013 supports a Moderate Buy consensus rating. The shares are priced at $448.80 currently, and their $512.82 average target price implies a 14% gain over the next year. (See VRTX stock forecast<\/a>.)<\/p>\n Cigna Group (CI)<\/p>\n The next stock we\u2019ll look at is Cigna, one of the health insurance market\u2019s major players, with its market cap standing at ~$76 billion. The company generated $267.93 billion of revenue from 4Q24 through 3Q25.<\/p>\n We should note, however, that Cigna has come under serious pressure in recent months, despite the company\u2019s strong position and ability to generate solid revenues. This past October, along with its 3Q25 results, Cigna announced that it will be switching its pharmacy benefit service, Evernorth, to a rebate-free model over the next two years. The move is expected to improve transparency while lowering costs and boosting local pharmacy operations. However, the company does predict substantial margin pressures as it renegotiates existing large contracts under the new system. Shares dropped 17% after the announcement, and have only partially bounced back since.<\/p>\n On another note, enrollment in Affordable Care Act plans has declined from 2025 to 2026, with recent numbers showing that, as of mid-December, ACA enrollment has fallen year-over-year from 16 million to 15.6 million. This decline comes as enhanced ACA subsidies ended on January 1.<\/p>\n Even though the stock is down, Cigna still has plenty of resources to weather storms of these sorts. The company has important contracts with major institutional customers, such as the Pentagon and Centene, and it is a leading provider of insurance policies for medical, dental, and disability coverage. Cigna is also a leading provider of insurance plans for both Medicare and Medicaid.<\/p>\n While the announced pharmacy program change spooked investors, Cigna\u2019s Q3 report showed a quarterly top line of $69.7 billion, up 10% year-over-year and $3 billion better than expected. The company\u2019s bottom line, the non-GAAP EPS of $7.83, beat the forecast by 19 cents per share.<\/p>\n Kevin Fischbeck, covering this stock for Bank of America, points out the insurance giant\u2019s strengths when he writes, \u201cCI\u2019s pure play position in commercial (the only business performing well) is a main reason behind why CI is the only Managed Care Organization (MCO) close to operating at its LT EPS trajectory. Meanwhile, its large pharmaceutical business is positioned well to capitalize on drug spending growth trends (its PBM and specialty drug businesses essentially mean that CI is long drug spending \u2013 obesity drugs, biosimilars, gene therapies, etc. \u2013 without having to pick specific winners and losers). At 8.1x 2027 EPS, the company is currently trading at a 12% FCF yield and near historical lows.\u201d<\/p>\n These comments back up Fischbeck\u2019s Buy rating on CI, while his $378 price target points to a one-year upside potential of 33%. (To watch Fischbeck\u2019s track record, click here<\/a>.)<\/p>\n The 15 recent analyst reviews on file for Cigna include 13 Buys against 2 Holds, for a Strong Buy consensus rating. The stock is currently trading for $283.97 and its $335.47 average target price implies an upside of 18% over the coming 12 months. (See CI stock forecast<\/a>.)<\/p>\n To find good ideas for stocks trading at attractive valuations, visit TipRanks\u2019\u00a0Best Stocks to Buy<\/a>, a tool that unites all of TipRanks\u2019 equity insights.<\/p>\n Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.<\/p>\n Disclaimer & Disclosure<\/a>Report an Issue<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"As 2026 gets rolling, it\u2019s only natural to want to find the best stocks to boost the portfolio…\n","protected":false},"author":2,"featured_media":221800,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[133199,3361,133200,134,527,111,139,69,6046,41074,133198],"class_list":{"0":"post-221799","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-healthcare","8":"tag-balanced-portfolio","9":"tag-bank-of-america","10":"tag-drug-candidate","11":"tag-health","12":"tag-healthcare","13":"tag-new-zealand","14":"tag-newzealand","15":"tag-nz","16":"tag-potential","17":"tag-savita-subramanian","18":"tag-vertex-pharmaceuticals"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/221799","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=221799"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/221799\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/221800"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=221799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=221799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=221799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/a> <\/p>\n
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