In June, the healthcare sector experienced a notable rally, increasing by over 6%, as investors sought defensive positions amid a 3% decline in the tech sector. This shift is attributed to healthcare stocks being relatively undervalued compared to high-flying tech names.
UBS strategist Gerry Fowler highlighted that healthcare is gaining global appeal, particularly in the U.S., where growth themes are becoming increasingly attractive. Raymond James has updated its top healthcare picks, adding UnitedHealth Group, which has seen a 28% increase this year, and is expected to benefit from positive earnings revisions and moderating medical costs.
UnitedHealth's recent quarterly earnings surpassed expectations, and the company raised its dividend by 5%. Meanwhile, Janus Living, a new entrant in the public markets, is also favored for its growth potential in the senior housing sector, supported by improving occupancy rates and demographic trends.
Janus has appreciated 45% since its IPO and is well-regarded by analysts, although both stocks have modest price targets suggesting limited upside in the near term