The COVID-19 pandemic has accelerated some health-care trends while opening people’s eyes to others that now seem obvious. Analysts at investment bank Jefferies have listed stocks of companies they argue are likely winners and losers from those trends.
A report called “Global Healthcare post COVID: Who benefits?” was put together by teams of health-care analysts at Jefferies’ offices in the U.S., Europe, India, Japan and Australia, and provided to the firm’s clients May 11.
If you want to invest in individual companies to take advantage of long-term post-pandemic trends, this is probably the time to make your moves, as equity markets are forward-looking.
What follows are the analysts’ expected winners and losers among stocks traded in the U.S.
Potential post-COVID-19 winners
The Jefferies analysts listed these 12 U.S.-traded companies as “winners” in the post-pandemic environment:
| Company | Ticker | Jefferies’ industry group | Jefferies’ rating | Closing price – May 11 | Jefferies’ price target | Implied 12-month upside potential |
| Perrigo Co. PLC | PRGO, +1.48% | Pharmaceuticals | Hold | $53.40 | $51 | -4% |
| Amedisys Inc. | AMED, +3.89% | Health Services | Buy | $178.03 | $210 | 18% |
| Encompass Health Corp. | EHC, +2.90% | Health Services | Buy | $68.36 | $100 | 46% |
| LHC Group Inc. | LHCG, +3.08% | Health Services | Buy | $142.86 | $150 | 5% |
| Centene Corp. | CNC, +4.34% | Health Services | Buy | $67.54 | $85 | 26% |
| Cerner Corp. | CERN, -0.73% | Health Services | Buy | $68.44 | $90 | 32% |
| Teladoc Health Inc. | TDOC, +2.61% | Health Services | Hold | $190.62 | $151 | -21% |
| DexCom Inc. | DXCM, +3.64% | Medtech | Buy | $421.36 | $369 | -12% |
| Hologic Inc. | HOLX, +1.01% | Medtech | Buy | $52.81 | $64 | 21% |
| Bio-Rad Laboratories Inc. Class A | BIO, +1.95% | Medtech | Buy | $470.35 | $500 | 6% |
| Danaher Corp. | DHR, +1.35% | Medtech | Buy | $161.71 | $185 | 14% |
| Thermo Fisher Scientific Inc. | TMO, +1.66% | Medtech | Hold | $340.39 | $350 | 3% |
| Source: FactSt | ||||||
You can click on the tickers for more about each company.
You will need to scroll the table to see all the data.
Potential post-COVID-19 losers
Here are the five U.S.-traded stocks included on the analysts’ list of expected “losers” from trends during and after the coronavirus pandemic:
| Company | Ticker | Jefferies’ industry group | Jefferies’ rating | Closing price – May 11 | Jefferies’ price target | Implied 12-month upside potential |
| CVS Health Corp. | CVS, +1.41% | Pharmaceuticals | Hold | $63.84 | $73 | 14% |
| Walgreens Boots Alliance Inc. | WBA, -1.15% | Health Services | Hold | $41.71 | $44 | 5% |
| Anthem Inc. | ANTM, +1.76% | Health Services | Hold | $272.37 | $257 | -6% |
| Henry Schein Inc. | HSIC, -0.46% | Health Services | Hold | $55.47 | $55 | -1% |
| Patterson Cos. Inc. | PDCO, +0.47% | Health Services | Hold | $16.42 | $16 | -3% |
| Source: FactSet | ||||||
The trends that drive the stock picks
Health services
For health-services companies, the analysts pointed to a trend that those with foresight may have identified before the terrible events of 2020: “Asset-heavy, inpatient-focused companies are likely to be at a disadvantage to leaner peers that are more focused on outpatients, diagnostic testing and using big data post-COVID.”
Who wouldn’t want to stay out of a nursing home or a hospital?
The analysts highlighted strengthened regulations leading to permanently higher costs for care in facilities, and also pointed to increased use of predictive diagnostics and telemedicine, as well as “sector disruption in technology and value-based care models.”
Read:Our hospitals need a bailout to cure their coronavirus-induced financial crisis
• Amedisys Inc. AMED, +3.89%, Encompass Health Corp. EHC, +2.90% and LHC Group Inc. LHCG, +3.08% were all listed as expected winners from the accelerated shift to in-home care.
• As the top provider of Medicaid-managed care services, Centene Corp. CNC, +4.34% was listed as an obvious beneficiary from massive U.S. unemployment.
• Jefferies calls Cerner Corp. CERN, -0.73% the “No. 2 player” in health-care information technology in the U.S.; the company is participating in the federal government’s systems rebuilds for the Department of Defense and the Department of Veterans Affairs.
• Teladoc Health Inc. TDOC, +2.61% is a clear winner already, with the critically important move toward telemedicine. But Jefferies rates the stock a “hold” because it has already risen 128% this year.
• CVS Health Corp. CVS, +1.41% and Walgreens Boots Alliance Inc. WBA, -1.15% were listed as “losers” because reductions in visits to doctors’ offices during past recessions led to “reduced demand for non-chronic prescriptions dispensed at retail pharmacies.”
Medical technology and tools
For medical technology, the Jefferies analysts cited “pent-up demand” for procedures and treatment in clinics, as well as increased “disease surveillance” and outpatient treatment.
• DexCom Inc. DXCM, +3.64% was listed as a winner from the industry move toward remote glucose monitoring for diabetes patients.
• Hologic Inc. HOLX, +1.01%, Bio-Rad Laboratories Inc. BIO, +1.95%, Danaher Corp. DHR, +1.35% and Thermo Fisher Scientific Inc. TMO, +1.66% were all listed as winners from high demand for testing services.
• Henry Schein Inc. HSIC, -0.46% and Patterson Cos. PDCO, +0.47% were listed as losers from reduced demand for dental devices.
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