How has coronavirus affected medical device stocks?

06 May 2020

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The current crisis has highlighted that healthcare systems weren’t prepared to deal with a pandemic this large

While most markets have fallen due to the spread of the novel coronavirus, stocks of healthcare companies selling medical devices and supplies have fared well because of a surge in demand for critical care products

However, for some the sales are declining, largely due to delay of elective surgeries
 
Abbott (6.2% YTD)
Abbott provides testing solutions for coronavirus, ranging from swab-based molecular tests that can be carried out on a portable testing device that provides positive results in as little as 5 minutes, to antibody-based tests, which require a blood draw and help to detect whether a person has or has had the virus in the past

Medtronic (-13% YTD)
Medtronic is primarily working on expansion of ventilator production currently. The company, in an admirable gesture, made the design and specifications of its portable ventilator publicly available online to help increase the global production of ventilators. Despite the company’s supply for ventilators, revenues in the near term are likely to be impacted by the ongoing crisis

Boston Scientific (-20% YTD return)
Boston Scientific is currently working on development of a ventilator alternative, and it is manufacturing personal protective equipment at its facilities. Most of the company’s products are used in surgeries, as shown in our dashboard on Boston Scientific Revenues. Given the postponement of elective surgeries, the company’s business could face headwinds in Q1 and Q2. Though Boston Scientific acquired BTG last year, and BTG is working on a possible vaccine candidate for COVID-19

Intuitive Surgical (-15% YTD return)
Intuitive Surgical also derives its revenue from sale of robotic surgical systems, their instruments and accessories, and servicing. The company has seen high growth over the past few years, led by procedures growth, but it will likely face headwinds in 2020

Baxter International (9.1% YTD return)
Baxter International’s stock has outperformed most of the medical devices companies, led by the surge in demand for its products required in hospitals. The company has boosted its capacity and production to help address higher demand for blood purification systems, drug delivery system, and other products used in the hospitals

DexCom (43% YTD return)
DexCom makes continuous glucose monitoring systems, and the company is benefiting from movement restrictions, as more people choose at-home glucose monitoring over visiting a clinic. This trend is expected to continue even after the COVID-19 winds down, as the acceptance of at-home monitoring increases. In fact, the company yesterday reported its Q1 numbers, which were above Street estimates with revenues surging 44% y-o-y. DexCom’s stock also is the biggest gainer year-to-date among large medical devices companies

*Source: Forbes