Major healthcare companies, including Johnson & Johnson (JNJ) and UnitedHealth Group (UNH), announced their third-quarter results Tuesday morning. Mizuho Healthcare Equity Strategist Jared Holtz joins Catalyst to discuss the outlook for the healthcare sector this earnings season.
Holtz points to three major factors impacting healthcare revenues: healthcare utilization, the upcoming U.S. presidential election, and merger and acquisition (M&A) activity.
Health care utilization is a “driving force” in companies' earnings reporting, Holtz said. Based on previous reports, he noted that the backdrop for surgical revenue remains strong, with “more patient movement,” surgical and other activity boding well for the overall healthcare sector. did.
“We're looking at this whole area to some extent, and it's really based on what patients are doing, what procedures they're getting. And we're seeing patients still operating very well. “I realized that,” Holtz explains.
Holtz acknowledged that the presidential election will have a short-term impact on the health care sector, but noted that investors will be watching the outcome closely. He points out that Medicare rates are typically more favorable to Republican leadership than Democratic leadership. He suggested that, “If that turns out to be the case, healthcare stocks could rebound.'' But Holtz doesn't foresee any major long-term changes in the sector as a result of the election results.
Regarding M&A activity, Mr. Holtz said: “All pharma companies face the same macro challenges across the board: pharma assets are not durable and there is a need for continued M&A to sustain revenue growth. It's going well, and profits are growing. ”
For more expert insights and analysis on the latest market trends, check out More Catalysts here.
This post was written by Angel Smith
