Novo Nordisk, AbbVie, and CVS Health are three attractive healthcare stocks to watch in June, according to 24/7 Wall St. Amid a challenging market environment, these stocks present compelling investment opportunities due to their strong cash generation and favorable forward valuations.
What happened
Novo Nordisk (NYSE: NVO) currently trades at around $44, significantly lower than its 52-week high of $81.44. The company’s price-to-free-cash-flow ratio stands at 5, while its free cash flow yield exceeds 20%. CEO Mike Doustdar emphasized that “Wegovy is driving a strong start to 2026,” noting that the medication has captured 65% of new prescriptions in its category, generating $2.26 billion in Q1 sales.[1]
AbbVie (NYSE: ABBV) presents a mixed picture, with a trailing P/E of 94. However, its forward P/E is more favorable at approximately 22, based on an expected earnings per share (EPS) of $12.78. The company reported a strong Q1, with $15 billion in revenue, topping expectations and leading to a raised FY26 adjusted EPS guidance of $14.08 to $14.28.
CVS Health (NYSE: CVS) is the cleanest forward-multiple story among the three. The stock trades around $102, with a forward P/E of about 14. The company reported a 53% increase in adjusted operating income within its Aetna segment in Q1. Management raised guidance for adjusted EPS to $7.30 to $7.50 for FY26.
Why it matters
Investors are keenly interested in stocks from the healthcare sector due to their resilience and cash-generating capabilities. As the Health Care Select Sector SPDR Fund (NYSEARCA: XLV) has dipped 1% year-to-date, certain companies within the sector now offer attractive valuations and growth potential that could yield significant returns.
High-margin operators like Novo Nordisk, AbbVie, and CVS Health are now trading at prices that undervalue their earnings and growth prospects. Analysts remain bullish on their performance, which is evident from the overwhelming buy ratings despite market skepticism.[3]
Background
On May 20, 2026, the healthcare sector faced scrutiny due to stagnant performance compared to other market segments. Despite a brief 6% bounce, the overall market direction remained challenging. Companies adapted to these market conditions, leading to revaluation and increased guidance in anticipation of improving performance.
The stock performances of these companies followed a year of volatility, impacting their valuations. Analysts began identifying attractive entry points for investors amid this backdrop, resulting in the current focus on their stocks.
What’s next
Investors should monitor upcoming quarterly reports for all three companies, particularly for Novo Nordisk’s Wegovy sales trends, AbbVie’s continued revenue growth, and CVS Health’s Aetna segment recovery. Specified earnings dates will provide critical insights into their financial trajectories and market positions.
