Donald Trump's election win prompted even more bullishness in a stock market. For healthcare investors, it represented yet another reason to dump some stock.
Trump's appointment of industry skeptics like Robert F. Kennedy Jr., alongside expectations of a Republican crackdown on programs like Medicaid and Obamacare, has prompted a selloff in everything from hospitals to pharmaceuticals, health insurers and biotech.
The election jitters exacerbated what had been a tough period for the industry. In 2023, healthcare underperformed the S&P 500 by about 22 percentage points, so many believed that 2024 would be a bounce-back year.
Instead, history repeated itself, with yet another 20-percentagepoint underperformance for healthcare. That created a valuation gap that looks like a historic aberration: The Health Care Select Sector ETF is trading at a discount of more than 20% to the S&P 500 based on their forward earnings multiples, far larger than the average 5% discount seen over the past two decades, according to FactSet.
The market bearishness is partly due to fundamentals. At a time when the U.S. economy is on solid footing and tech companies are riding high on the artificial intelligence frenzy, most healthcare subsectors seem to be caught in a negative earnings-revision cycle, writes Asad Haider, a healthcare equity strategist at Goldman Sachs.
The reasons are idiosyncratic.
هذه القصة مأخوذة من طبعة January 07, 2025 من The Wall Street Journal.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
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هذه القصة مأخوذة من طبعة January 07, 2025 من The Wall Street Journal.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك? تسجيل الدخول