3 Beaten-Down Healthcare Stocks to Buy in August
Joel South
Mon, August 10, 2026 at 5:30 PM GMT+5:30
5 min read
Quick Read
LLY grew Q1 revenue 56% and won FDA approval for the first oral GLP-1 pill, yet still trades 6% off its 52-week high
Healthcare has trailed SPY’s 8% YTD gain, but JNJ’s 64-year dividend streak and 20x forward P/E keep it compelling for value investors
ABBV’s Skyrizi and Rinvoq surged 31% and 23%, more than offsetting Humira’s decline while supporting a 53-year consecutive dividend increase streak
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Year to date, the healthcare sector finds itself in the middle of the S&P 500’s pack. But over the past three months, that corner of the market has led all 11 sectors with a 13.10% gain. It’s still lagging YTD, but that lag is exactly what makes the group interesting right now
The SPDR S&P 500 ETF Trust(NYSEARCA:SPY) is up 13.02% year to date, while two of the three largest pharmaceutical names by market cap are trailing it. With healthcare flagged by analysts as an undervalued entry point heading into the second half, here are three mega-cap drug makers offering a rare mix of innovation exposure and income. Note that all three have rallied off spring lows, so the “beaten-down” label applies more to relative-to-market performance and prior 52-week highs than to outright drawdowns.
Eli Lilly (LLY)
Eli Lilly (NYSE:LLY) is the cleanest example of a relative laggard. Shares trade at $1,189.34, up just around 10% year to date, below the SPY’s gain and notably off about 4% from the 52-week high of $1,182.73
The fundamentals are accelerating. Q2 2026 revenue hit $22.97 billion, up 47.7% YoY, after reaching $19.80 billion in Q1. EPS of $8.38 beating the $6.40 estimate. Eli Lilly raised its full-year 2026 revenue outlook to between $85 billion and $87 billion, after raising it in the wake of Q1 earnings to a range of $82 billion to $85 billion
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Risk: Realized prices fell 13% due to rebates and NRDL inclusion in China, and the franchise still leans heavily on a small group of products vulnerable to future biosimilar competition
Johnson & Johnson (JNJ)
Johnson & Johnson (NYSE:JNJ) is the exception to the beaten-down framing: The stock is up 24.11% year to date around $257.34 and approaching its 52-week high of $274.90. The reason it still belongs on a value list is the forward valuation, which sits at 20x earnings
