Undervalued stocks: Pfizer, Novo Nordisk, PDD Holdings

What happened: Pfizer (PFE) and Novo Nordisk (NVO) are trading at significantly low valuations despite strong fundamentals. Pfizer, trading at 8x forward earnings, has a robust pipeline with 20 pivotal studies launching in 2026 and obesity assets from its $7 billion Metsera acquisition. Novo, trading at 14x forward P/E, saw its oral Wegovy capture 65% of new US prescriptions and generate $2.26 billion in Q1. PDD Holdings (PDD), a Chinese e-commerce company, reported an 11% year-over-year increase in total revenues but missed on both the top and bottom lines, leading to a stock price drop.

Market impact: This narrative affects large-cap healthcare stocks, particularly those involved in pharmaceuticals and e-commerce. Pfizer and Novo Nordisk's undervaluation could lead to increased institutional interest, driving up their stock prices. PDD Holdings' miss could impact investor sentiment towards Chinese e-commerce stocks, affecting companies like Alibaba and JD.com.

What to watch next: Pfizer's earnings report on July 27 will provide insights into its pipeline progress and potential revenue growth. Novo Nordisk's US price cuts for Wegovy, planned for the second half of 2023, could impact its earnings and stock performance. PDD Holdings' Q2 2023 earnings, expected in late August, will offer updates on its business transformation and potential revenue growth.