Health and Healthcare
Top 4 Medtech Picks From Merrill Lynch
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Currently, medical technology, or medtech, is barely outperforming the S&P as health care is struggling despite what is seen as low valuations. Although these valuations are attractive, the backdrop for health care is not as attractive, and Merrill Lynch believes that there are more catalysts needed.
The brokerage firm has some ideas about how to take advantage of this trend going forward, including: Boston Scientific Corp. (NYSE: BSX), Intuitive Surgical Inc. (NASDAQ: ISRG), Medtronic PLC (NYSE: MDT) and Zimmer Biomet Holdings Inc. (NYSE: ZBH).
Merrill Lynch sees two issues having an impact on health care. First is the concern around the U.S. election and the rhetoric on drug prices, and second is the concern that the two major drivers of value creation in health care from 2013 to 2015 are now much less pronounced. According to the firm:
Those drivers of value creation had been improving volumes due to ACA and the improving economy, and a material increase in M&A across multiple healthcare sectors. Offsetting the less favorable macro backdrop are attractive valuations, but in our view, low valuations are not enough to drive stocks in this environment. There needs to be a catalyst.
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