Zacks Investment Ideas feature highlights: CVS Health, Johnson & Johnson and Tenet Healthcare
Chicago, IL – August 4, 2025 – Today, Zacks Investment Ideas feature highlights CVS Health CVS, Johnson & Johnson JNJ and Tenet Healthcare THC.
3 Medical Stocks to Consider as Markets Take a Breather
The broader indexes have cooled off in the last few trading sessions after what was another pleasant month for the stock market in July.
While the market has been able to shrug off trade war concerns on the way to a historic rebound, President Trump has officially signed an executive order to hit most of the United States' trading partners with tariff hikes, which ignited a pullback on Friday as July's Jobs Report came in weaker than expected.
Considering the benchmark S&P 500 and the tech-centric Nasdaq looked due for a breather after spiking more than +10% in the last three months, investors may be scoping out some defensive positions. That said, these medical sector stocks may continue to provide this defensive safety, as there will always be a constant need for health care.
CVS Health
Zacks Rank #2 (Buy)
CVS Health's transformation into an innovative pharmacy company with integrated offerings across the entire spectrum of pharmacy care is paying off. Thanks to strong earnings, raised guidance, and renewed investor confidence, CVS stock has surged over +30% this year but still trades at just 10X forward earnings and offers a very generous 4.28% annual dividend yield.
In addition to sporting a Zacks Rank #2 (Buy), CVS stock currently checks an overall 'A' VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum.
Johnson & Johnson
Zacks Rank #2 (Buy)
Pharmaceutical giant Johnson & Johnson checks the value box, with a reasonable 15.1X forward earnings multiple and a 3.16% annual dividend yield. Furthermore, investors seemed to have flocked to Johnson & Johnson stock earlier in the year during heightened market volatility, and JNJ is still up +15% in 2025 to top the S&P 500 and Nasdaq's returns of roughly +7%.
Although Johnson & Johnson's growth has slowed, steady top and bottom line expansion is still in the forecast, and the medical leader has one of the most diversified business models. Having more than 275 subsidiaries, Johnson & Johnson's pipeline of drugs/treatments covers neuroscience and mental health, oncology, immunology, pulmonary hypertension, cardiovascular, rare, and infectious diseases.
Tenet Healthcare
Zacks Rank #1 (Strong Buy)
We'll round out the list with Tenet Healthcare, an investor-owned health care services company that owns and operates general hospitals and health care facilities for urban and rural communities in numerous states.
Boasting a Zacks Rank #1 (Strong Buy), THC stock is benefiting from a very pleasant trend of positive earnings estimate revisions. With Tenet Healthcare's annual earnings now expected to leap 25% in fiscal 2025 to $14.92 per share, it's noteworthy that these EPS revisions have climbed 17% in the last 60 days from estimates of $12.69 two months ago. Plus, THC is up +25% YTD and trades at 10X forward earnings.
Strongly suggesting Tenet Healthcare's impressive stock performance should continue, FY26 EPS is projected to expand another 4% to $15.48, and estimates have spiked 14% in the last 60 days.
On top of being a 'feel-good' investment in regard to Tenet Healthcare reaching underserved communities, THC checks the fundamental trading boxes with an 'A' VGM Zacks Style Scores grade.
Bottom Line
Hopefully, the excitement for AI-driven growth will continue to push the broader market higher, but these top medical stocks can provide the defensive safety that investors may need with volatility starting to resurface amid President Trump's tariff hikes and last month's unfavorable jobs report.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks Names #1 Semiconductor Stock
This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.
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Johnson & Johnson (JNJ): Free Stock Analysis Report
CVS Health Corporation (CVS): Free Stock Analysis Report
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