The valuation fell to a ten-year low! Barclays covered 26 US medical technology stocks for the first time, preferring Syk.US (SYK.US) and others

The Zhitong Finance App learned that Barclays analyst Christopher Pasquale covered 26 US medical technology companies for the first time on Tuesday and added SYK.US (SYK.US) and ABT.US (ABT.US) to the recommended list of large-cap medical technology stocks. The bank pointed out that the recent poor performance of the medical technology sector has provided investors with an opportunity to buy high-quality companies at attractive valuations.

Prior to Pasquale's optimism, the industry benchmark iShares US Medical Device ETF (IHI.US) fell nearly 19% over the past five years, while the S&P 500 index rose nearly 77% during the same period.

He wrote in the report: “After several years of relatively poor performance due to slowing revenue growth, the current valuation of medical technology stocks has fallen to its lowest point in ten years, and the discount margin compared to the S&P 500 index has also reached the highest level since the peak of the tech bubble.”

He called this round of sell-offs an overreaction, partly due to specific headwinds from multiple companies over the past year, “making the return of the industry's growth rate to average seem like there has been a more serious deterioration in fundamentals.”

Pasquale anticipates that the potential stabilization of the revenue of large medical technology companies next year may be a catalyst to boost market sentiment and increase valuation multiples. “While we believe investors should remain cautious until the outlook is more clear, we believe that the current market environment has attractive investment opportunities.” he added.

Which individual stocks are worth buying? Stryker and Edward Life Sciences lead the list of additional holdings

Barclays listed Stryker and Edward Life Sciences (EW.US) as the first choice for large-cap stocks, with target prices of $375 and $110, respectively. Other large cap stocks rated as “overweight” include Abbott, with a target price of $120; GE HealthCare Technologies (GEHC.US), with a target price of $85; and Intuitive Surgery (ISRG.US), with a target price of $485.

In terms of small to medium cap stocks, Barclays listed Beta Bionics (BBNX.US), Decon Healthcare (DXCM.US), and LivaNova (LIVN.US) as the first choice for small and medium capitalization stocks, with target prices of $30, $115, and $105, respectively. Other small to medium cap medtech stocks rated as “overbearing” include Axogen (AXGN.US), with a target price of $55; BLCO.US (BLCO.US), with a target price of $24; Procept BioRobotics (PRCT.US), with a target price of $30; and TransMedics (TMDX.US), with a target price of $120.

Which individual stocks need to be cautious? Medtronic and Boston Scientific received a “neutral” rating, and Baxter and Bidi were “reduced”

Companies rated “neutral” include: Alcon (ALC.US), with a target price of $70; Antreus Technology (AVR.US), target price of $10; Boston Scientific (BSX.US), target price of $48; Humacyte (HUMA.US), target price of $0.50; PODD.US (PODD.US), target price of $150; Medtronic (MDT.US), target price of $22; Senseonics ( SENS.US), target price of $10; Tandem Diabetes (TNDM.US), target price of $18; Cooper Company (COO.US), target price of $60; ZBH.US (ZBH.US), target price of $100.

Companies rated for “reduced holdings” include: Bax.US (BAX.US), with a target price of $20; BDX.US (BDX.US), with a target price of $165; and Inspire Medical (INSP.US), with a target price of $65.