In light of the recent market selloff from coronavirus fears, Wells Fargo analyst Larry Biegelsen reviewed his coverage universe to identify MedTech names that he believes will be most immune to a wider spread of the disease around the world. The criteria he used to determine which names would likely be most resilient included exposure to China; patients' ability to defer procedures; product availability via channel outside of a hospital; near-term catalysts; and potential increased demand for certain products due to coronavirus. The names Biegelsen believe are best positioned to weather a wider spread of coronavirus are Baxter (BAX), Becton Dickinson (BDX), Cooper Companies (COO), Johnson & Johnson (JNJ), Novocure (NVCR), and Penumbra (PEN).
News For BAX;BDX;COO;JNJ;NVCR;PEN From the Last 2 Days
Raymond James analyst Jayson Bedford resumed coverage of Baxter (BAX) with an Outperform rating and $93 price target. He blames a slowdown in gross margin improvement and slower revenue growth for relative stock price underperformance, but views the Hill-Rom (HRC) deal as "opportunistic" and sees revenue growth and accretion tied to the deal making Baxter "a far more interesting story," Bedford tells investors. The deal to buy Hill-Rom gives him more confidence that Baxter can grow revenue at about 5% pro-forma and will have "visible 10%+ EPS growth," added Bedford.