3 Upgraded Healthcare Stocks to Buy Now

NYSE: MCK | McKesson Corporation  News, Ratings, and Charts

MCK – Analysts are betting on healthcare stocks to outperform the broader markets in the near term, given the increased demand for virtual healthcare amid the rapid spread of the COVID-19 omicron variant, among other factors. Given this backdrop, fundamentally sound healthcare stocks McKesson (MCK), Henry Schein (HSIC), and Tivity Health (TVTY) might be ideal investment bets now. So, let’s discuss.

The healthcare industry is in the limelight again, due in part to the rapid spread of the COVID-19 omicron variant, which has increased the demand for virtual healthcare of late. According to MDPI, 89% of patients view telemedicine as an acceptable form of medical care.

In addition, the sedentary lifestyles of many people have increased chronic health issues. Also, the rapid tech integration in the healthcare industry has delivered medical breakthroughs for treating chronic and life-threatening ailments. In addition, investors’ interest in this industry is evident in the Health Care Select Sector SPDR Fund’s (XLV) 5.3% returns over the past three months.

So, we think it could be wise to add recently upgraded healthcare stocks McKesson Corporation (MCK), Henry Schein, Inc. (HSIC), and Tivity Health, Inc. (TVTY) to one’s watchlist.

Click here to checkout our Healthcare Sector Report

McKesson Corporation (MCK)

San Francisco-based MCK offers healthcare supply chain management, retail pharmacy, community oncology, and specialty care and healthcare information solutions globally. It has four segments: U.S. Pharmaceutical; International; Medical-Surgical Solutions; and Prescription Technology Solutions. Credit Suisse recently upgraded the stock’s rating to ‘Outperform.’

On Nov. 1, 2021, Brian Tyler, CEO of MCK, said, “We remain committed to investing in our growth strategies of biopharma services and oncology ecosystems, while simultaneously increasing shareholder returns.”

MCK’s revenues increased 9.5% year-over-year to $66.58 billion in its fiscal 2022 second quarter, ended Sept. 30, 2021. Its total current assets were $45.58 billion for the period ended Sept. 30, 2021, compared to $45.38 billion for the period ended March 31, 2021. Also, its total liabilities, redeemable noncontrolling interests, and equity (deficit) was $63.6 billion the period ended Sept. 30, 2021, compared to $65.02 billion for the period ended Sept.30, 2021.

For its fiscal 2022, MCK’s revenue is expected to grow 9.1% year-over-year to $259.96 billion. Its EPS is estimated to increase 32% year-over-year to $22.71 in fiscal 2022. It surpassed the EPS estimates in each of the trailing four quarters. And over the past year, the stock has gained 36.5% in price to close Friday’s session at $249.76.

MCK has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has a B grade for Growth, Value, Stability, and Sentiment. MCK is ranked #1 of 88 stocks in the Medical – Services industry. Click here to see the additional POWR Ratings for MCK (Momentum and Quality).

Henry Schein, Inc. (HSIC)

HSIC provides health care products and services to dental practitioners and laboratories, physician practices, government, institutional health care clinics, and other alternate care clinics worldwide. The Melville, N.Y.-based company has two segments, Health Care Distribution; Technology; and Value-Added Services. Analysts at Credit Suisse Group recently upgraded it from “neutral” to an “outperform.”

On Dec. 1, 2021, Henry Schein Orthodontics, the orthodontics business of HSIC, announced the launch of Studio Pro™ 4.0, a new web-based treatment planning software for Reveal® Clear Aligners (Reveal). Phil Prentice, President, Henry Schein’s Orthodontics Group, said, “Featuring direct integrations with many leading intraoral scanners, as well as direct connections with practice management software, Reveal is the clear choice to help practitioners meet the clear aligner needs of their patients.”

HSIC’s net sales increased 11.9% year-over-year to $3.18 billion for its fiscal third quarter, ended Sept. 25, 2021. The company’s net income came in at $162.29 million, up 14.5% year-over-year, and its EPS was $1.15, up 16.2% year-over-year.

Analysts expect HSIC’s revenue to be $12.2 billion in its fiscal 2021, representing a 20.5% year-over-year rise. In addition, the company’s EPS is expected to increase 46.8% year-over-year to $4.36 in fiscal 2021. Also, it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 12.8% in price to close Friday’s trading session at $78.95.

HSIC’s strong fundamentals are reflected in its POWR ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. HSIC has a B grade for Value. It is ranked #29 of 167 stocks in the Medical – Devices & Equipment industry. Click here to see the additional POWR Ratings for HSIC (Growth, Momentum, Stability, Sentiment, and Quality).

Tivity Health, Inc. (TVTY)

TVTY in Franklin, Tenn., provides fitness and health products primarily to seniors and older adults in the United States. It is a leading provider of healthy life-changing solutions, including SilverSneakers®, Prime® Fitness, WholeHealth Living®, and Wisely WellTM. Credit Suisse recently upgraded it to ‘Neutral,’ raising the price target to $29.

On Nov. 2, 2021, Richard Ashworth, President & CEO, said “We delivered strong results for the third quarter of 2021.  We are raising guidance ranges on revenue, adjusted EBITDA, and cash flow for the full year.”

TVTY’s revenues increased 32.3% year-over-year to $126.29 million for its fiscal third quarter ended Sept. 30, 2021. The company’s net income came in at $102.77 million, compared to a  $42.42 million loss in the year-ago period, and its EPS came in at $2.04, compared to a $0.86 loss per share.

For its fiscal year 2021, analysts expect TVTY’s revenue and EPS to increase 9.9% and 13.7%, respectively, year-over-year to $481.01 million and $1.66. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 21.6% in price to close Friday’s trading session at $24.81.

TVTY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. TVTY has a B grade for Quality. Within the Medical – Services industry, it is ranked #22 of 88 stocks. Click here to see the additional POWR Ratings for Growth, Value, Momentum, Stability, and Sentiment for TVTY.

Click here to checkout our Healthcare Sector Report


MCK shares were trading at $250.22 per share on Monday afternoon, up $0.46 (+0.18%). Year-to-date, MCK has gained 0.66%, versus a -2.43% rise in the benchmark S&P 500 index during the same period.


About the Author: Riddhima Chakraborty


Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...


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