|
Below is a complementary research note written by our Healthcare Team of Tom Tobin, William McMahon, and Justin Venneri. We are pleased to announce our new Sector Pro Product Health Care Pro. Click HERE to learn more. |
COVID winners have been on sale since the start of the 'Garbage Trade' began with Pfizer's news of a highly effective COVID19 vaccine. The COVID comp is coming and for those that benefitted it will be winter, for those that suffered it will be spring.
For the winners, the COVID-19 vaccine will mean a return to in person care for the 50 million Americans over the age of 65 and the millions more who have high risk medical conditions.
Optometry and Dentistry immediately come to mind as the kind of medical care with its close face to face contact that high risk patients have likely been avoiding. The key to sorting out the winners from the losers won't be too difficult, but figuring out how large or how small the comparison, and what has already priced into the stock, will require some nuance.
PCE data offers a helpful starting point where we can see the Quantity Index across Prescription Pharmaceuticals, Physicians, Hospitals, Medical Labs, and Dentists.
The data suggests that heading into the pandemic lockdown, patients understood the emerging risks and filled their prescriptions.
For Medical Laboratories, COVID testing has driven volume above pre-pandemic level, a hard comp. Physician Services, Hospitals, and especially Dentistry are still well below pre-COVID levels and there is plenty of room to run.
Not only is there room to go higher, demand will likely extend well beyond "normal" demand. A volumes return to normal levels of demand we will also see the addition of almost a year of deferred care.
