Whether it's worth investigating the pharmaceutical stocks listed on the FTSE 100?
Top Pharmaceutical Stocks in the FTSE 100 Show Resilience Amid Trade Tensions
The pharmaceutical sector, represented by top stocks in the FTSE 100, has demonstrated resilience in the face of trade tensions, particularly under the Trump administration.
One of the standout performers is AstraZeneca, the largest stock in the FTSE 100 by market capitalisation. The company posted a 30% profit increase in Q2 2025, with core earnings per share rising 17% to $4.66. Despite this strong performance, AstraZeneca's share price dipped by around 1.5% on August 1, 2025, following Trump's threat of a 200% tariff on US imports of pharmaceuticals.
AstraZeneca's revenue for the second quarter increased by 11% to $28 billion, and the company expects its fiscal 2025 revenues and core EPS to continue growing. However, the company did not upgrade its forecast for the year, as noted by Derren Nathan, head of equity research at Hargreaves Lansdown, who added that AstraZeneca's pipeline progress adds confidence that the 2030 revenue target of $80bn is one to meet or beat.
Another notable performer is GSK, whose EPS rose 15% to 46.5p in the second quarter. GSK's revenue increased 6% to £8 billion, and sales of speciality medicines rose 15%, with the HIV franchise and oncology division growing by 12% and 42% respectively. Shares in GSK are up 7.8% so far this year.
Haleon, a spin-off from GSK, reported Q2 revenue of £2.63 billion, representing 3.0% in organic revenue growth. However, Haleon's stock opened 3.1% lower on 31 July following the results.
The ongoing trade tensions, particularly Trump's tariff regime, pose a significant challenge for globally diversified companies, including those in the pharmaceutical sector. The potential impact of these tariffs is evident in the share price dips experienced by AstraZeneca and GSK.
Despite this, investor sentiment remains cautiously optimistic as the strong earnings fundamentals have partly offset trade tensions. AstraZeneca, with an 8% weight in the FTSE 100, has a significant impact on the index.
Whether it is a good time to buy FTSE 100 pharma stocks is a question that requires careful consideration. While the market has shown resilience, with some gains driven by strong sector earnings, ongoing uncertainty from tariffs and global economic conditions poses risk, leading to volatility.
Investors considering entry should weigh AstraZeneca's solid growth outlook against the potential impact from continuing trade disputes. Pharma stocks in FTSE 100 remain defensive plays with growth prospects, but exposure to US tariffs adds some near-term risk.
Weight loss drugs offer a potentially huge market for companies like Astrazeneca, with the potential for significant growth in the future. However, the impact of tariffs on this market remains to be seen.
In summary, AstraZeneca and GSK have performed well fundamentally but experienced share price dips directly attributable to Trump's tariff announcements on the US market. The pharmaceutical sector's fundamentals remain robust, making it a cautiously suitable time to consider investments, provided one is comfortable with potential trade-related volatility.
- The potential impact of tariffs on the pharmaceutical sector, as shown by the share price dips of companies like AstraZeneca and GSK, underscores the challenges faced by globally diversified companies.
- The strong earnings fundamentals of pharmaceutical stocks in the FTSE 100, such as AstraZeneca and GSK, have partially offset trade tensions, resulting in cautiously optimistic investor sentiment.
- Weight loss drugs could represent a significant growth market for pharmaceutical companies in the future, but the potential impact of tariffs on this market is yet to be determined.
- In the context of personal finance and investing, the ongoing trade tensions and the potential impact of tariffs on pharma stocks like AstraZeneca demand a careful consideration before making investment decisions.
- Health-and-wellness, and more specifically the pharmaceutical sector's focus on medical-conditions like weight loss, presents an opportunity for businesses looking to invest, but with the understanding that exposure to US tariffs could lead to near-term risk and volatility.
