U.S. equities are under fresh pressure on Monday morning as the typical December holiday cheer is nowhere to be found. No Santa Claus rally looks likely to save the large-caps from putting in a negative performance for 2018. This came as a shock to investors after a record rise in 2017 and many months of easy, persistent gains in mega-cap technology stocks.
It’s a reminder that good things come to an end.
The catalysts are familiar: Fears over Federal Reserve policy tightening, indications of economic weakness overseas, a swelling federal deficit and expectations of a slowdown in corporate earnings growth. Even defensive areas are now feeling the pressure as investors abandon risk wholesale.
And healthcare stocks are not immune to the damage. Here are five healthcare names to sell right now:
Johnson & Johnson (JNJ)
Shares of Johnson & Johnson (NYSE:JNJ) have fallen below their 200-day moving average to return to levels not seen since August, down nearly 13% from the highs seen in early December. The selloff comes in the wake of more scandal surrounding its baby/talcum powder, which has been the subject of lawsuits and accusations of malfeasance. The latest is that the company reportedly knew some of its powder contained asbestos.
The company will next report results on Jan. 22 before the bell. Analysts are looking for earnings of $1.95 per share on revenues of $20.2 billion. When the company last reported on Oct. 16, earnings of $2.05 beat estimates by two cents on a 3.6% rise in revenues.
Gilead Sciences (GILD)
Gilead Sciences (NASDAQ:GILD) shares are down 16% from the highs set in early October, a double-top high that now sets up a possible violation of the May lows that would put the mid-2017 levels near $60 in play — which would be worth a 10% drop from current levels. Analysts at Piper Jaffray recently downgraded shares to “neutral.”
The healthcare stock should next report results on Feb. 5 after the close. Analysts are looking for earnings of $1.70 per share on revenues of $5.5 billion.
When the company last reported on Oct. 25, earnings of $1.84 beat estimates by 21 cents on a 14.1% drop in revenues.
Tenet Healthcare (THC)
Tenet Healthcare (NYSE:THC) shares are breaking down, falling below critical support from April to return to lows not seen since February. This marks a decline of 50% from the highs seen in July, a dramatic selloff the reverses the bulk of the rally off of the late 2017 lows. Analysts at Baird recently downgraded the stock to neutral.
The healthcare stock will next report results on Feb. 25 after the close. Analysts are looking for earnings of 29 cents per share on revenues of $4.5 billion. When the company last reported on Nov. 5, earnings of 29 cents per share beat estimates by 17 cents on a 2.1% drop in revenues.
Anthem (NYSE:ANTM) shares are breaking out of the uptrend channel going back to late 2016, returning to levels seen during the summer as prices fall towards the 200-day moving average. The selloff comes despite a price target upgrade from Barclays analysts on earnings visibility.
The company will next report results on Jan. 30 before the bell. Analysts are looking for earnings of $2.20 per share on revenues of $23.4 billion.
When the company last reported on Oct. 31, earnings of $3.81 beat estimates by 11 cents on a 4% rise in revenues.
Unitedhealth Group (UNH)
Unitedhealth Group (NYSE:UNH) shares are testing the bottom of a long uptrend channel going back to early 2016. Shares have been hit by the recent ruling that “Obamacare” is unconstitutional after Republicans passed a law dumping parts of the law. If coverage is rolled back, it would be a negative for hospitals due to less demand for services.
The company will next report results on Jan. 15 before the bell. Analysts are looking for earnings of $3.21 per share on revenues of nearly $58 billion. When the company last reported on Oct. 16, earnings of $3.41 beat estimates by 11 cents per share on a 12.4% rise in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
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