Update-2… 1/31… Good value in Pfizer (PFE) as stock near new lows with PE of 8.26 stock at $43.50. but nobody cares as boom times for COVID vaccines end.Provides Full-Year 2023 Revenue Guidance(4) of $67.0 to $71.0 Billion and Adjusted Diluted EPS(3) Guidance of $3.25 to $3.45. Looking for a reset with RSV vaccine and Paxlovid. Dividend at 3.77%.
Updates ..1/25..Abbott (ABT) reports full 2022 year sales growth of 1.3% of $43.7B with GAAP dilute EPS of $3.91. Revenues hit by decline in COVID-19 sales decline and manufacturing disruptions with U.S. Infant Formula. Projects high single digit revenue growth for 2023 with bright spot FreeStyle Libre continuous glucose monitoring system. Medical device sales weak in China caused by COVID-19 curbs. Stock trades down to $110.44 level mid-day.
Update.1/24....Danaher (DHR) tops estimates with full year 2022 revenue increase of 7% to $31.5 B and $9.66 EPS a 13.5% increase YoY.Core revenue for 2023 to grow mid- high single digits. Stock was down1.96% to $271.58 at close.
Intuitive surgical (ISRG) fell 9.1% after hours to $234.50 with a miss, cites COVID disruptions in China. Installed base WW grew 12% to 7544 systems. Narrowly missed Q4 profit.
Healthcare Sector Is Lagging in 2023
- Small Cap Biotech has momentum but large cap biopharma lags.
- Technology and Semiconductors lead the market in 2023.
- Upcoming earnings could be pivotal
We are in the ” foggy zone” between #JPM23 and earnings season so it is hard to forecast healthcare and biotech stocks performance. We can gauge technicals and trade major life science ETFs.The healthcare sector is perceived as defensive but in 2023 there is more investor appetite for risk based on the QQQs comeback and the XBI strength. Healthcare lags in 2023 while semiconductors are hot with the SMH is up 15% YTD.
The market is still clouded by the FED’s determination to raise rates and keep money tight. The next FED Meeting is in February and expectations are for a 0.25% rate increase. In the meantime many economists and strategists are expecting a mild recession. Earnings and guidance will be telling
Here are some trends to watch based on the data and recent trading.
- Based on my trades and other momentum indicators- ARKG, XBI- the small cap rally should continue through January.
- Large cap biopharma sold off from #JPM23 week. That is expected since they led through-out 2022.
- MedTech sector is improving: FSMEX,IHI.
- The IBB looks better than the XLV for non-traders.
- Key Earnings and guidance to watch over next 2 weeks: DHR 1/24, ABT1/25, TMO 2/1, HOLX 2/1, BDX 2/2, ILMN 2/7, MRNA 2/22, large cap biopharmas on 2/2, VRTX 2/7,
- Two large cap biopharma stocks are included in the Investors Business Daily IBD Big Cap 20 rankings: #1 Vertex Pharmaceuticals (VRTX) and #4 BioMarin Pharmaceutical (BMRN).
Disclosure: long ABT, ABBV, IWM, IHI, MRK, PRHSX, UNH, VRTX, XBI.
|10/25||%||12/31||% Perf||12/31/21||12/31/22||%Perf||1/22||% Perf|
|iShares NAZ Bio||IBB*||136||15||151.5||25.7||152.62||130.55||3.69||135.47||3.18|
|iShares Russell 2k||IWM||163||10||196.4||18.3||222.45||174.36||-7.83||185||6.13|
|SPDR S&P Bio||XBI||117||10||140.8||48||111.96||83||-5.41||86.99||4.81|
|T.Rowe Hlth Sci||PRHSX||n/a||5||99.65||n/a||104||89||-0.81||90.15||0.37|
|iShares U.S MedT||IHI||50||5||54.83||65.85||52.57||-8.86||54.54||3.75|
|Bristol Myers Sq||BMY||71.58||14.82||74.15||3.06|