There are plenty of attractive stocks on the market. Some, though, have significantly underperformed their growth potential this year, making them attractive at their current levels.
This list includes Novo Nordisk (NVO 1.72%) and Vertex Pharmaceuticals (VRTX +0.47%). They may not be the very best businesses on Wall Street, but considering the fact that they have lagged the market this year despite having excellent prospects over the next five, they are among my top two stocks I'd consider buying in the last quarter of 2025 heading into 2026.
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1. Novo Nordisk
The bears will point out that Novo Nordisk is losing ground in the GLP-1 market to its most important competitor, Eli Lilly. And to make matters worse, several clinical setbacks suggest that it won't be able to keep up with its longtime rival from here on out, or so the argument goes.
However, there are several important things to note. First, the GLP-1 space is growing incredibly rapidly. And even with a smaller piece of the pie, Novo Nordisk's revenue and earnings should continue growing at a good clip -- and faster than the average for pharmaceutical companies its size -- for the foreseeable future.
Novo Nordisk's two most important medicines, Wegovy and Ozempic, are still posting solid growth. Second, recent (and upcoming) label expansions should help Novo Nordisk.
Wegovy is now approved to treat metabolic dysfunction-associated steatohepatitis, and an oral version of the medicine is racing toward regulatory approval in weight management. Meanwhile, Novo Nordisk's Rybelsus also earned approval for treating major cardiovascular events. All that should help the company maintain strong financial results.
NYSE: NVO
Key Data Points
Third, Novo Nordisk's pipeline in weight management looks far better than that of almost any of its peers. It boasts promising candidates across various clinical development phases, including an investigational triple agonist (a medicine that mimics the action of three separate hormones, including GLP-1), and an oral and subcutaneous formulation of amycretin, a dual agonist of the GLP-1 and amylin. The latter is a hormone that helps regulate blood sugar levels.
Lastly, Novo Nordisk's shares are more than reasonably valued. The company is trading at 14.1 times forward earnings, compared with the healthcare sector's average of 17.5. Novo Nordisk is well positioned to rebound, perhaps as early as next year, as it reports clinical progress with key candidates and continues to deliver excellent financial results.
2. Vertex Pharmaceuticals
Vertex Pharmaceuticals is looking at several catalysts over the next couple of years. First, the company's clinical trial for zimislecel, an investigational therapy for type 1 diabetes, is going well. The biotech giant plans to submit regulatory applications for the medicine next year.
Second, Vertex could post important late-stage data for other candidates. One of them is inaxaplin, a medicine being developed to treat the underlying causes of APOL-1 mediated kidney disease -- there is currently no such therapy.
This is part of Vertex's plan to expand beyond its core therapeutic area, cystic fibrosis (CF), which it continues to dominate. The company's efforts to diversify have been mixed so far. Though it has launched Casgevy, a gene editing medicine for sickle cell disease and beta thalassemia, it isn't generating much in sales yet. However, it should slowly come into its own over the next few years, as will Vertex's other new launch outside of CF, Journavx, which treats acute pain.
NASDAQ: VRTX
Key Data Points
Meanwhile, the drugmaker's core specialty will remain an important growth driver. Vertex has continued to innovate in CF, recently launching Alyftrek, a medicine that is just as effective as its previous crown jewel, Trikafta, but with a more convenient once-daily dosing.
Vertex faced clinical setbacks this year. It had to abandon development of another T1D medicine, while data from a phase 2 study of VX-993, which targeted acute pain, were negative. The biotech also reported worse-than-expected results, especially in the first quarter, due to issues in Russia. The company's shares aren't cheap either, trading at 21 times forward earnings.
Even so, Vertex's late-stage pipeline and existing lineup of approved medicines -- including a monopoly in its core therapeutic area and biggest source of growth -- justify its premium and could help it bounce back over the next five years.
