Quick Read

  • NVO sits 44% below its 52-week high with a price-to-free-cash-flow of 5 and a free cash flow yield above 20%.

  • XLV’s flat 2026 performance masks CVS trading at a forward P/E of 14 with 86% analyst buy ratings and zero sell ratings.

  • Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and AbbVie didn’t make the cut. Grab the names FREE today.

Healthcare has spent 2026 on the sidelines while the rest of the market does the heavy lifting. The Health Care Select Sector SPDR Fund (NYSEARCA:XLV) is down around 1% year to date even after a 6% one-month bounce. That stagnation has left a handful of high-margin operators trading at forward multiples that look out of step with their cash generation. Here are three to put on the radar this month.

A futuristic digital image featuring glowing blue and green tones. An upward-curving arrow, composed of intertwining data streams, dominates the center, pointing towards growth. Below it are three illuminated icons: a molecular structure on the left, a caduceus symbol in the middle, and a shield icon on the right. In the blurred background, abstract representations of DNA helices, cells, and stock market candlestick charts with an upward trend are visible, all contributing to a theme of innovation and progress in the medical and financial fields. 24/7 Wall St. Novo Nordisk (NYSE: NVO)

Novo Nordisk (NYSE:NVO) is the most aggressive value setup of the three. The stock is a U.S.-listed ADR, so American holders should factor in Danish withholding tax on dividends. Shares trade around $44, well below the 52-week high of $81.44, and the stock is down 45% over the past year and 15% year to date.

The “ridiculously cheap” framing has real teeth here. Novo Nordisk carries a price-to-free-cash-flow ratio of 5, a free cash flow yield north of 20%, an operating margin of 41% and ROE of 61%. Wegovy is doing the heavy lifting: The oral version launched Jan. 5, and posted $2.26 billion in Q1 sales, capturing 65% of new U.S. prescriptions in the category with more than 1 million patients. Total Wegovy revenue hit $18.235 billion in Q1, up 12%, and management narrowed FY26 sales guidance to -4% to -12% growth at constant exchange rates.

CEO Mike Doustdar framed it directly: “Wegovy is driving a strong start to 2026 … the most efficacious GLP-1 tablet now used by more than one million patients since its January launch.”

Risk: The MFN pricing agreement with the US Administration, intensifying competition from tirzepatide and a CagriSema REDEFINE 4 trial that missed its primary endpoint are real overhangs. Reddit sentiment also shifted sharply bearish in early June, suggesting the bottom may not be in.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and AbbVie didn’t make the cut. Grab the names FREE today.

AbbVie (NYSE: ABBV)

AbbVie (NYSE:ABBV) requires a small framing softener. The headline trailing P/E of 94 looks rich, but the forward multiple reframes the setup: an implied forward P/E of 22 on $12.78 in forward EPS, with 75% of analysts bullish and an average target of $253.55. For a company with 70% gross margins and 33% operating margins, that is a reasonable multiple.

Story Continues

The growth engine is intact. Skyrizi delivered $4.48 billion in Q1, up 31%, and Rinvoq added $2.12 billion, up 23%. Q1 revenue of $15.00 billion topped the $14.72 billion estimate, and management raised FY26 adjusted EPS guidance to $14.08–$14.28. CEO Robert Michael told investors, “We are off to an excellent start in 2026, with first-quarter results exceeding our expectations.” The stock has returned 17% over the past year (down 2% YTD), yet the forward multiple has not stretched.

Risk: Humira keeps bleeding, falling 39% in Q1 to $688 million. Imbruvica dropped 25%. IPR&D charges are recurring noise. Investors must trust Skyrizi and Rinvoq to outrun the legacy decline.

CVS Health (NYSE: CVS)

CVS Health (NYSE:CVS) is the cleanest forward-multiple story of the three. Shares trade around $102 against forward EPS of $10.48 for an implied forward P/E of roughly 14. That is unusually low for a defensive healthcare conglomerate generating $10.64 billion in 2025 operating cash flow.

The Q1 report was the fourth straight EPS beat. Adjusted EPS of $2.57 topped the $2.21 consensus, on revenue of $100.43 billion. The Aetna segment turned the corner: adjusted operating income climbed 53% to $3.04 billion as the medical benefit ratio improved to 85% from 87%. Management raised FY26 adjusted EPS guidance to $7.30–$7.50 and bumped cash flow guidance to at least $9.5 billion. CEO David Joyner kept it short: “Our positive performance is driven by strong execution across our enterprise.”

The market has noticed. CVS is up 28% year to date and 54% over the past year. Even after that run, analyst consensus remains 86% bullish with zero Sell ratings, and one r/wallstreetbets thread captured the tone bluntly: “CVS about to break 100!!! Yes there are stocks other than AI ones.”

Risk: Elevated medical cost trend, pharmacy reimbursement pressure, opioid litigation and the $5.72 billion goodwill impairment booked in Q3 2025 remind investors that the Aetna recovery is not finished. If utilization spikes again, the MBR gain reverses fast.

What to Watch

All three names share the same template: high margins, raised 2026 guidance, and forward multiples that price in skepticism the operating results have not yet earned. Keep an eye on the next quarterly cadence. If Wegovy oral momentum holds, Skyrizi and Rinvoq keep compounding, and Aetna’s MBR stays below 85%, the “cheap” tag fades quickly.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and AbbVie didn’t make the cut. Grab the names FREE today.