All articles tagged with #healthcare sector
An analyst predicts the stock market will continue climbing, with the S&P 500 reaching 7000 by 2026, driven by strong earnings, AI productivity gains, and growth in financial and healthcare sectors, while advising caution on consumer discretionary stocks due to tariffs.
Health insurance stocks, including CVS Health, UnitedHealth Group, and Humana, are experiencing declines as the Biden administration stands firm on Medicare Advantage payment rates, which are lower than what insurance companies had sought. The finalized rates are expected to have broader impacts on the healthcare sector.
Change Healthcare expects the cybersecurity incident to disrupt its operations for at least a day, suspecting a nation-state behind the attack, leading to manual processing of prescriptions at some hospitals and retail pharmacies. The American Hospital Association advises health systems to disconnect from Change Healthcare and Optum, with cybersecurity experts concerned about the broad impact due to the company's responsibility for massive amounts of patient data. The incident, believed to be a result of hackers exploiting vulnerabilities in a remote IT platform, is seen as an attack on the entire healthcare sector, with potential negative credit implications for Optum's parent company, UnitedHealth Group.
Novo Nordisk's parent company, Novo Holdings, has acquired Catalent, a fill-finish company, to enhance supply capabilities for GLP-1 weight loss drugs like Ozempic and Wegovy. Meghan Fitzgerald, a healthcare policy professor, sees this move as positive due to the supply problem in meeting patient demand. However, the persistent high costs of these drugs, around $1,000 a month, pose challenges for patients and insurance providers, especially those heavily invested in Medicare Advantage. The healthcare sector is facing headwinds such as inflation, labor shortages, and provider margin pressure, with Medicare Advantage providers being particularly exposed to risk in the near term.
Prominent weight-loss drugs, known as GLP-1s, made by Novo Nordisk and Eli Lilly, may not have as much lasting impact on healthcare in 2024 as previously expected. Analysts are predicting less need for medtech devices and surgeries due to the popularity of these drugs, but recent commentary suggests a shift away from the initial fear and panic surrounding their impact. Fast-food and fast-casual chains' valuation rebound is credited to a cooling GLP-1 narrative, with industry veterans noting that accessibility to these drugs is difficult for lower-income consumers and that healthier alternatives may boost business. The uptake of these drugs, accessibility, side effects, and production constraints are still key factors in determining their long-term impact.
Retail investors have flocked to buy shares of Eli Lilly after the U.S. pharmaceutical company received approval for its weight-loss drug, Zepbound. Daily net purchases reached a more than two-year high of $14.4 million on November 8, signaling a resurgence of interest in the healthcare sector. Eli Lilly and Novo Nordisk, both leaders in the potential $100 billion obesity treatment market, have attracted retail investors who are now catching up with institutional investors. Despite a decline in overall retail flows to U.S. exchanges, interest in weight-loss drugmakers remains strong.
Two funds, BCX and HQH, are recommended for investors looking to generate strong income in October. BCX, a fund that invests in commodity-driven companies, offers a yield of 7% and is trading at a discount to NAV, making it an attractive option. HQH, a healthcare-focused fund, has a yield of 10.6% and is currently trading at a steeper discount to NAV than usual. Both funds provide exposure to sectors that are expected to thrive, with commodity prices remaining elevated and the healthcare sector historically outperforming the market. Investing in these funds allows investors to benefit from dividends and secure financial security.