Breaking News

Medicare-For-All risk overblown, investors should buy MCOs, says SVB Leerink. SVB Leerink analyst Ana Gupte believes Medicare-For-All risk is overblown, not the same as 2008/09, and recommends investors step in now to buy MCOs. The analyst believes it is a "once in a decade opportunity" to get high quality names at these depressed multiples, with UnitedHealth (UNH), Anthem (ANTM), and Humana (HUM) being her favorites.

eHealth selloff not related to company specific news, says RBC Capital. RBC Capital analyst Frank Morgan says he's found no company specific news that would explain the weakness today in shares of eHealth. Rather, the analyst attributes the 22% pullback to continued selling in managed care operators and providers, which began yesterday morning. He attributes yesterday's sell-off to Democratic presidential candidate rhetoric around Medicare-for-All, including a tweet from candidate Bernie Sanders during UnitedHealth's Q1 earnings call advocating for MFA. Morgan believes investors were looking to take profits in any strong year-to-date performers, like eHealth. The analyst has an Outperform rating on the stock with an $83 price target. eHealth in afternoon trading is down 22%, or $14.05, to $51.38.

JPMorgan lowers UnitedHealth target to $235 on 'sustainable' political risk. JPMorgan analyst Gary Taylor last night lowered his price target for UnitedHealth to $235 from $301 following the company's Q1 earnings report. The reduction is due to "renewed and sustainable Election year political risk," particularly around leading Democrats' plans for single-payor Medicare-For-All plans, Taylor tells investors in a research note. The analyst, however, does not believe UnitedHealth said anything fundamentally negative on the earnings call to justify the corresponding stock selloff. The analyst attributes the reversal in trading yesterday's to renewed and continuing Medicare-For-All political fears. He keeps an Overweight rating on shares of UnitedHealth. The stock in morning trading is down 3%, or $7.64, to $213.32.

Issues facing healthcare sector now 'modest' compared to 2008-10, says Stephens. Stephens analyst Scott Fidel noted that the managed care group has sharply underperformed the S&P 500 over the last month amid "political rhetoric" around point-of-sale drug rebates and Medicare for all policy proposals, though he believes the issues facing the sector right now "seem modest in comparison" to the "dark days of 2008-2010." While recent Medicare for all proposals have rattled investors, "they will face enormous uphill battles," Fidel tells investors. Hospital stocks have outperformed MCOs year-to-date, but the group declined about 9% yesterday and underperformed the MCO group, which Fidel attributes to acknowledgement by industry bellwether UnitedHealth (UNH) of the significant disruptive nature of Medicare for all, which may have sparked additional fears, as well as one less calendar day being called out by UnitedHealth as benefiting Q1 MLRs and Johnson & Johnson's (JNJ) earnings call commentary on declining sequential hospital admissions from Q4. Publicly traded companies in the hospital space include Community Health (CYH), HCA Healthcare (HCA), LifePoint (LPNT), Tenet (THC) and Universal Health (UHS). Publicly traded companies in the managed care space include Anthem (ANTM), CVS Health (CVS), Centene (CNC), Cigna (CI), Health Net (HNT), Humana (HUM), Molina Healthcare (MOH), UnitedHealth (UNH) and WellCare (WCG).