Update-1 4/17/25–-UNH shares crash over 20% on earnings release due to higher medical costs. Unbelievable surprise because this was supposed to be the most defensive stock.Revised outlook from Medical Advantage business due to heightened care activity.
Lilly shares soar 14% on data from weight loss drug. Phase 3 oral pill comparable to injectable GLP-1 .
ICAD gets acquired for over $100M. I worked on an AI imaging project in 2001! It always takes longer than it does.GE Healthcare (GEHC) was languishing in GE for many years before its growth exploded after it was spun-out. Now GE Healthcare stock is depressed (by tariffs) at the $62 level with a forward PE of 11.90 and a Price to Sales of 1.45.
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- US Medical Device ETF (IHI) was flat at the $56 handle in a down market today.
- Tariff risks looms large for pharmaceuticals and devices but looks manageable, but it is early in the earnings cycle.
- Overall continues to look defensive because of domestic market stability despite supply chain impact.
Amidst the tariff chaos we may get clues from one of the most defensive sectors of the market-healthcare stocks. Recently we provided a playbook of positions for those actively managing their LIFE SCIENCE portfolios. However in the midst of tariff chaos and policies targeting various countries lurching weekly it will be difficult for CEOs to provide forward guidance.But a few large cap Companies have reported with good outlooks. In the meantime tariff costs are growing.
A takeaway from economists after the Powell speech was that tariffs will slow growth and that deals need to be made with major countries to prevent a recession. Interest rate cuts cannot help because of stagflation risk. A big concern would be the supply chain impact on costs.
The medical device sector has shown sluggish growth since the pandemic and looks better with innovative new products for cardiology and diabetes.
BDX another top pick in MEDtech.will report on MAY 1.
On a positive note Abbott Labs beat and raised guidance and the stock is up over 2%. Abbott will invest $500M in manufacturing and R&D in TX and IL. Tariff impact will hit in Q3. EPS is forecasted at $5.05-5.25. Worldwide Nutritional sales increased 3.2% to $2.14 B. Global DX sales decreased 4.9% QtQ to $2.054B. Medical Device sales increased 9.9% globally.
Johnson and Johnson (JNJ) reported yesterday with quarterly revenues of $25B consisting of $8.02B in MEDtech and $13.87B in Innovative Medicines with a total 2025 sales projected at $91.8B. Sales forecast included the recent $15B acquisition of mental illness drug developer Intra-Cellular Therapies. The lead product in this category is Caplyta ,a pill that treats bipolar depression and schizophrenia. On he conference call the CEO, warned tea new tariffs will add $400M in costs, and that tax policy would be better way to build manufacturing capacity in the U.S.Full year EPS is expected to be maintained at 6.2% growth, at $10.50-10.70 per share.
Disclosure LONG: ABT and JNJ.
