Healthcare Setting Up for a Catch-Up Trade in H2? Charts Suggest ’Maybe’

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

Healthcare Setting Up for a Catch-Up Trade in H2? Charts Suggest ’Maybe’

has been a tough sector in 2025, and really since the middle of 2024.

Here’s an interesting chart from Bank of America: (via @MikeZaccardi on X):

This is the hidden content, please

• Sign In
• or
• Sign Up

/applications/core/interface/js/spacer.png">

Looking at Q1 ’25 earnings trends, the sector reported a solid quarter, even with United Health’s (NYSE:) issues:

This is the hidden content, please

• Sign In
• or
• Sign Up

/applications/core/interface/js/spacer.png">

Q2 and Q3 ’25 are showing lower or negative revisions, and lower levels of absolute Healthcare EPS growth.

This is the hidden content, please

• Sign In
• or
• Sign Up

/applications/core/interface/js/spacer.png">

Q4 ’25 (not shown) is still for 9% growth as of this weekend, down from 16% as of April 1 ’25.

Full-year 2025: 

This is the hidden content, please

• Sign In
• or
• Sign Up

/applications/core/interface/js/spacer.png">

It looks like Q2 ’25 could be the low point for healthcare sector earnings growth, for this year, but the sector is being buffeted by a number of headwinds, including RFK’s appointment and his attitude on vaccines, tariff issues, a sizeable reduction in Medicaid funding, which would undoubtedly impact prescription and other healthcare services coverage for the lower-income segment, and the President’s desire to lower prescription costs for general Medicare, etc., and that probably doesn’t cover all the reasons either.

Even Eli Lilly, (NYSE:) the star of the large-cap pharma space with the dietary drug Zepbound, and Mounjaro, has had a tough ’25, down 4% on the year as of Friday, May 30th, ’25. The stock is now oversold on the daily and weekly charts.

Conclusion:

One of the better-performing individual stocks in 2025 is Johnson & Johnson (NYSE:) (JNJ), up 9.25% YTD, while one of the better-performing ETFs is the iShares U.S. Medical Devices ETF (NYSE:), +6.13% YTD.

What’s been a surprise is how quickly the expected strong 2025 EPS growth for healthcare has slowed (the last table under full-year 2025), but it is still one of the strongest rates of growth within the expected in 2025, along with technology and communication services.

Expected healthcare sector EPS growth is actually stronger than the expected communication sector EPS growth this year.

The puzzle is the lack of relative strength for the sector.

While this blog’s weekly posts are written as much to inform and educate, the fact is writing about a particular sector inevitably sheds some insight, and looking at the relationship between the earnings trends and the sector performance, at some point healthcare will likely be added to client accounts.

Here’s one final chart from @sentimenttrader on the healthcare sector:

This is the hidden content, please

• Sign In
• or
• Sign Up

/applications/core/interface/js/spacer.png">

Disclaimer: None of this is advice or a recommendation, but only an opinion. This blog is by no means an expert on the healthcare sector or healthcare issues. Past performance is no guarantee of future results. The information above may or may not be updated, and if updated may not be updated in a timely fashion. Readers and investors should gauge their own comfort with market volatility and adjust accordingly.

This is the hidden content, please

• Sign In
• or
• Sign Up

#Healthcare #Setting #CatchUp #Trade #Charts #Suggest

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up