Pharmaceutical stocks reacted to President Trump’s demand to lower drug prices within 60 days, adding to healthcare stock struggles this year. Morningstar analysts find biopharma stocks undervalued despite uncertainties surrounding Trump’s mandate, which Congress must pass into law. Among the 17 firms receiving letters, Novo has seen the worst stock performance, down over 40% due to generic competition for its obesity drug Wegovy. Trump’s focus on drug pricing and potential tariff impacts have investors wary of biopharma growth prospects, but Morningstar believes many firms are trading below fair value. Seven out of 13 pharma stocks are considered undervalued by Morningstar analysts, with Pfizer, GSK, and Roche labeled as significantly undervalued. Four companies are close to fair value, while Novartis and Lilly are deemed overvalued.

Read more at Morningstar: What’s Next for Pharma Stocks After Trump’s Drug Price Ultimatum?