Healthcare Stock Presentation Overview & Analysis
Explore a comprehensive overview of healthcare stock presentation, sector recommendations, company analysis, and financial insights. Dive into key drivers, growth opportunities, and potential risks in the healthcare industry.
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Healthcare Stock Presentation Gabe Hartnett, Pudong Zhang, Michael Zhou
Overview Healthcare Companies SIM Portfolio Hold 2
Overview Sector Recommendation Recap Healthcare sector weight in S&P 500 is 15.22%, and weight is SIM portfolio is 19.06%, 3.84% higher than S&P 500. Recommended to overweight Healthcare to S&P 500 Preference to Pharmaceuticals and Health Care Providers 3 Source:Fidelity
Overview Company Current Price (12/2/22) Price Target Upside/Downside Stock Recommendation Elevance Health Inc $523.60 $606.62 15.86% BUY Bristol-Myers Squibb $81.13 $102.29 26.08% BUY McKesson Corp $386.85 $340.57 -12% SELL HOLD Merck & Co $110.04 $112.55 2.28% HOLD UnitedHealth Group $536.16 $607.83 13.37% 5
Overview Healthcare Stocks in SIM Portfolio Company Holding Amount $273,385 % of Portfolio P/E P/S Beta Elevance Health Inc (ELV) Bristol-Myers Squibb (BMY) McKesson Corp (MCK) Merck & Co (MRK) United Health Group (UNH) 3.11% 15.1 1.63 0.92 $359,461 4.09% 25.74 3.67 0.39 $486,713 5.54% 27.34 0.21 0.66 $315, 744 3.60% 18.25 4.74 0.39 $238,715 2.72% 25.33 1.61 0.76 6
Financial Analysis ROE Company ROE Elevance Health 17.32% Bristol-Myers Squibb 19.11% N/A (Negative ROE) McKesson Corp 38.03% Merck & Co 26.81% UnitedHealth Group 7 Source:Morningstar
Elevance Health Inc. Elevance Health, formerly known as Anthem, is a health benefits organization that provides an integrated whole health approach by providing health plans providing clinical, behavioral pharmaceutical and complex care solutions to patients. Company Overview An economic downturn with a recession coming lead to defensive industries out performing the overall market Elevance Health has been able to quickly adapt since Covid-19 and be a leader in telehealth and adapting to their subscribers wants. Elevance Health has also been on an upward trajectory with double digit growth historically as well as expected in the next couple years. Key Drivers Elevance Health 5 Year Stock Price 8
Growth Drivers Strong Telehealth business built throughout Covid-19 pandemic Many corporate clients as well as providing services for State Medicare/Medicaid plans Agile business model Potential Risks Several years of strong performance already Upcoming recession could potentially negatively impact business operations or customer base 9
Valuation Elevance DCF 10
Overview Bristol Myers Squibb Company Overview Bristol Myers Squibb (BMS, NYSE: BMY) is a global biopharmaceutical company that develops and provides innovative medicines to help patients all over the world Therapeutic areas include Solid Tumors, Oncology, Hematology, Immunology, Cardiovascular, Fibrotic Diseases, and Neuroscience Key Drivers Potential growth with new product portfolio High opportunities for mid and late-stage assets Great innovation for an early-stage pipeline Strong cash flow Bristol Myers Squibb 5 Year Stock Price 11
Bristol Myers Squibb Growth Drivers and Potential risks Growth Drivers Potential growth with new product portfolio High opportunities for mid and late-stage assets Great innovation for an early-stage pipeline Strong cash flow Potential risks Potential economic recession in the future New products patent issues New drug trial results affect the stock price of the company 12
McKesson Corporation McKesson is a healthcare company founded in New York city back in 1833. Its headquarter located in Irving Texas. Now it has over 75000 employees, who work together to distribute pharmaceuticals, provides health information technology, medical supplies, and care management tools Current oligopoly position in medical distribution Aging population in the United States Potential recession drives defensive sector up Company Overview Key Drivers McKesson 5 Year Stock Price 14 Source Google Finance
Pestle Analysis and Sensitivity Analysis Political Economic Sociological Technological Legal Environmental Governmental regulation Potential recession Universal healthcare Introduction of AI controlled substance (opioids) Environmental structure 15
Growth Drivers Growing healthcare coverage Aging society Potential Risks Legal tangles Governmental regulation 16
Valuation McKesson DCF 17
Financial Analysis Stocks(BMY, ELY, MCK vs. S&P 500 18 Source Yahoo Finance
Financial Analysis Average 10 Year Net-Income Growth McKesson: 5.37% Elevance Health Inc: 4.07% Bristol-Myers Squibb: 3.15% 19
Business Drivers McKesson Elevance Health Bristol-Myers Squibb Monopoly position in medical distribution Aging population in the USA Elevance Health has been agile and quickly able to adapt to environmental factors. Leader in customer relations and quality of service. Works primarily with corporations as well as a few state run Medicare/Medicaid programs Bristol-Myers Squibb generates large sales revenue in 2021 and expects to gain revenue from the new drug products. Has many partner relationships with other healthcare companies and is able to generate steady revenue in the future. Has a strong balance sheet, less debt, and high liquidity 20
Stock Recommendations Company Current Price Recommendations Target Price Current Weighting Recommendation Weighting After Expected Return $523.60 $606.62 3.11% Buy 189 bps 5.00% 15.86% Elevance Health Inc (ELV) $81.13 $102.29 4.09% Buy 91 bps 5.00% 26.08% Bristol-Myers Squibb (BMY) $386.85 $340.57 5.54% Sell 554 bps 0% -12.00% McKesson Corp (MCK) $110.04 $112.55 1 3.60% Hold 3.60% 2.28% Merck & Co (MRK) $536.16 $607.83 1 2.72% Hold 2.72% 13.37% UnitedHealth Group (UNH) 21 190 bps left if we want to reach 3% over the S&P 500. 1 Source: www.alphaspread.com
