Medical Journal of the Islamic Republic Of Iran

en Economic and Financial Determinants of Pharmaceutical Stock Returns: Evidence from Panel Data Analysis Public Administration & Health management and economics Public Administration & Health management and economics Original Research Original Research     Background: Fundamental analysis has gained significant attention among capital markets researchers and investors in recent years. In the fundamental analysis method, it is assumed that stock returns are not solely determined by the stock market; major effects originate from the overall economy, industry situation, and company conditions. This research aimed to investigate the relationship between financial fundamentals, stock returns, and investment risk.    Methods: The study was a retrospective analytical study. The financial data of 20 pharmaceutical firms listed on the Tehran Stock Exchange from April 2011 to March 2021 were assessed by panel data analysis in Eviews to evaluate the relation between fundamentals and risk and return.    Results: The results demonstrated that 23 and 35 percent of changes in stock return in the same year and the following year can be explained by seven significant variables, including cash ratio, asset turnover, inventory turnover period, debt-equity ratio, quick ratio, total inflation, and healthcare inflation. In this analysis, we also assessed the impact of fundamental variables on investment risk. The results showed that six significant variables, including gross profit margin, debt-asset ratio, quick ratio, interest coverage rate, total inflation, and healthcare inflation, can explain 35 percent and 30 percent of investment risk for the same year and the following year, respectively.    Conclusion: The fundamentals and macroeconomic factors can partially predict the risk and return of pharmaceutical companies.   Fundamental analysis, Firm’s Performance, Markowitz model, Panel data analysis, Pharmaceutical industry, Stock return 1365 1370 http://mjiri.iums.ac.ir/browse.php?a_code=A-10-9357-1&slc_lang=en&sid=1 Mohammadmahdi Mojahedian mahdimojahedian@gmail.com 200319475328460095340 200319475328460095340 No Department of Pharmacoeconomics, School of Pharmacy, Iran University of Medical Sciences, Tehran, Iran Hossein Takamoli hossein.takamoli@gmail.com 200319475328460095341 0009-0009-9757-6308 No Department of Pharmacoeconomics, School of Pharmacy, Iran University of Medical Sciences, Tehran, Iran Ahmad Ahmadi Teymourlouy ahmadi.sa@iums.ac.ir 200319475328460095342 200319475328460095342 No Department of Healthcare Management, School of Health Management and Information Sciences, Iran University of Medical Sciences, Tehran, Iran Azita Nabizadeh Az_nabizade@yahoo.com 200319475328460095343 200319475328460095343 No 4. Department for Assessment and Control of Prescription and Use of Medicine, Iran Food and Drug Administration, Tehran, Iran Saman Zartab saman.zartab@kums.ac.ir 200319475328460095344 200319475328460095344 Yes Pharmaceutical Sciences Research Center, Health Institute, Kermanshah University of Medical Sciences, Kermanshah, Iran