My Top 3 Drug Stocks for March 2026

Key Points
Innovative drugmakers tend to perform well over the long run.
These three drug stocks can launch new products while maintaining or improving their financial results.
- 10 stocks we like better than Eli Lilly ›
Drug stocks can be somewhat volatile. Things like clinical setbacks or patent cliffs can sink their stock prices or erode their profits and market share. However, one good thing about companies in this industry is that there will always be a need for innovative medicines, which remain in high demand regardless of economic conditions. That makes drugmakers, particularly the best ones capable of consistently developing new products, attractive long-term holdings. Let's consider three, in particular, that look attractive right now: Eli Lilly (NYSE: LLY), Vertex Pharmaceuticals (NASDAQ: VRTX), and Pfizer (NYSE: PFE).
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The leading weight loss player
The market for chronic weight management drugs has taken off in recent years. Analysts predict it will continue to expand over the next decade. No drugmaker is better positioned to capitalize on this than Eli Lilly. The company already leads this market thanks to tirzepatide, a compound approved for diabetes, weight loss, and obstructive sleep apnea in obese patients. Tirzepatide is beating records.
In 2025, in its third full year on the market, it became the world's best-selling medicine. And by 2030, it could generate annual sales of about $62 billion, according to some estimates, a peak never before seen in the pharmaceutical industry.Tirzepatide grants Eli Lilly excellent prospects in this rising market.
But the company also has several pipeline candidates that will help strengthen its lead in this field. Although competition in this market will heat up, no drugmaker has posted late-stage clinical trial results that suggest it could take the lead from Eli Lilly. Lastly, the healthcare leader has invested in its pipeline by developing or licensing medicines across several other areas. Eli Lilly isn't just a weight loss stock. The company's innovative capabilities in this niche and others, as well as its excellent financial results, make it an attractive stock to buy and hold.
A biotech diversifying beyond its core area
Vertex Pharmaceuticals dominates its field of cystic fibrosis (CF) drugs, a disease characterized by the production of thick mucus in the lungs and pancreas, leading to difficulty breathing and many other problems. Vertex's products don't just address breathing problems in CF patients. They target the underlying genetic causes of it, and they are the only ones on the market to do so, granting Vertex a monopoly. The company generates consistent revenue and earnings as a result, and that should continue for a while. Although the disease is considered rare, the CF population grew at a compound annual rate of 3% between 2020 and 2025. Further, existing patients, who typically take Vertex's drugs indefinitely, are living longer.
All of that means Vertex's target market is growing. However, Vertex Pharmaceuticals is also expanding beyond CF. Its lineup of approved products now includes Journavx, a medicine for acute pain, and Casgevy, a therapy for two blood-related disorders. And there are likely more approvals on the horizon, especially given Vertex Pharmaceuticals' recent strong phase 3 results for povetacicept, an investigational medicine for IgA nephropathy. Vertex is well-positioned to perform well over the medium term (and beyond) as it maintains its lead in its core market and advances in others.
An undervalued dividend stock
Pfizer has not performed well in recent years. Between stiff competition for some products and the uncertainty and cyclicality of sales from its coronavirus portfolio, revenue growth has been slow to nonexistent. However, there are several reasons why it's a great stock to buy. Let's consider four of them. First, Pfizer's shares look deeply undervalued. The stock is trading at 9.3 times forward earnings, with the average forward price-to-earnings for the healthcare sector being 17.4.
Second, the company has a deep pipeline that should eventually help it launch new products and improve its financial results. Pfizer plans to start over 20 phase 3 studies this year, including across oncology and weight management. As these progress and eventually earn approval, Pfizer's shares could recover. Third, Pfizer is improving its bottom line despite its struggles, thanks to AI-powered changes and expense-reduction initiatives across the business.
Lastly, Pfizer is an attractive dividend stock. The company's forward yield tops 6.3%. All those reasons make Pfizer a solid option for long-term income seekers.
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Prosper Junior Bakiny has positions in Eli Lilly and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Pfizer and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.