2 Healthcare Stocks Wall Street Predicts Will Rally by 40% or More

NYSE: NVTA | Invitae Corporation  News, Ratings, and Charts

NVTA – The healthcare industry’s relatively inelastic demand and its crucial role in fighting the COVID-19 pandemic will likely make it a popular choice for investors seeking to hedge their portfolios against a possible market correction. Given genomics’ and technology-based healthcare products’ explosive growth potential, Wall Street analysts expect Invitae (NVTA) and OPKO Health (OPK) to deliver tremendous upside in the near term. Read on.

The healthcare industry is again in the headlines amid surging Delta coronavirus infections nationwide. Consequently, healthcare stocks are gaining momentum amid rising market volatility and the increasing possibility of a market correction. This is evident in the Health Care Select Sector SPDR Fund’s (XLV) 3.2% gains over the past month versus the broader SPDR S&P 500 Trust ETF’s (SPY) 0.9% returns.

The dominant role played by the healthcare industry in the global health crisis has propelled capital inflows from governments and private organizations. Also, the disruptive progress in the field of genomics and diagnostic testing achieved by leveraging technology is expected to revolutionize healthcare. In this regard, investor and founder of the world’s largest actively traded ETF company, Cathie Wood, said in a recent CNBC interview, “DNA sequencing is going to introduce science into healthcare decision making for the first time…We’re going to be able to cure diseases that we never thought it would be possible to cure, including cancer.”

Wall Street analysts expect the healthcare industry to emerge as one of the best performers in the coming months, given the innovative breakthroughs made so far and its boundless growth potential. As investors rotate toward the healthcare industry to hedge against market volatility, analysts expect Invitae Corporation (NVTA) and OPKO Health, Inc. (OPK) to rally more than 40% in the near term.

Click here to checkout our Healthcare Sector Report for 2021

Invitae Corporation (NVTA)

NVTA in San Francisco is an integrated medical genetics company with a global market presence. The company leverages a diversified portfolio of laboratory processes, software tools, and informatics capabilities to offer panels to detect hereditary conditions in cancer, cardiovascular diseases, neuromuscular and rare ailments.

For its fiscal first quarter, ended March 31, NVTA’s revenues increased 61.3% year-over-year to $103.62 million. This can be attributed to a 57.4% rise in Test revenues and a 271.4% rise in revenues from the ‘Other’ segment.

On July 22, NVTA partnered with global healthcare software leader Volpara Health to gain access to the latter’s extensive customer base. Under this agreement, Volpara’s U.S.-based customers are expected to access NVTA’s comprehensive genetic testing services. This should increase NVTA’s customer base and its revenues significantly.

Also in July, NVTA expanded its multi-year collaboration agreement with Pacific Biosciences of California, Inc. to develop a production-scale high-throughput HiFi sequencing platform. This partnership should improve the accuracy of genome testing and achieve economies of scale.

A $463.25 million consensus revenue estimate for its fiscal year 2021 indicates a 65.7% rise year-over-year. The company’s EPS is expected to improve 10.8% in the current year and at a rate of 8% per annum over the next five years.

Shares of NVTA have gained 2.5% over the past five days. Of the five Wall Street analysts that rated the stock, two rated it buy while three rated it Hold. The  $39.75 12-month median price target indicates a 40.5% potential upside from yesterday’s $28.29 closing price. The price targets range from a low of $33.00 to a high of $50.00.

OPKO Health, Inc. (OPK)

OPK is a diagnostic and pharmaceutical healthcare company that operates through three segments–Pharmaceutical; Diagnostics; and Corporate. The Miami, Fla., company offers laboratory testing services through its diagnostics segment, while its pharmaceutical segment develops drugs to treat various life-threatening diseases.

OPK’s total revenues increased 47.9% year-over-year to $442.40 million in its fiscal second quarter, ended June 30. This can be attributed to a 58.2% rise in revenues from its Services segment and a 21.8% rise in revenues from Products. Its BioReference Laboratories test volume increased 32% from the same period last year.

On July 12, the company agreed to an exclusive worldwide arrangement with CAMP4 Therapeutics Corporation to develop and manufacture AntagoNAT technology-based therapeutics. OPK is eligible to receive $93.50 million and additional shares provided the partnership yields promising results. This move should allow OPK to monetize and leverage its early-stage assets.

In June, OPK’s subsidiary EirGen Pharma partnered with Nicoya Macau Limited to develop and commercialize its drug RAYALDEE to treat hyperparathyroidism in Greater China. OPK received a $5 million upfront payment under this agreement and is eligible to receive an additional $120 million provided Nicoya achieves a predetermined milestone. This partnership should expand the company’s royalty income significantly.

The Street expects OPK’s revenues to rise 24.6% from its year-ago value to $1.79 billion in its fiscal year 2021. EPS is expected to come in $0.08 in the current year, indicating a 60% rise year-over-year.

OPK has gained 3.2% intraday to close yesterday’s trading session at $3.55. All  three Wall Street analysts that rated the stock have rated it Buy. The $6, 12-month median price target  indicates a 69% potential upside. The price targets range from a low of $5.00 to a high of $7.00.

Click here to checkout our Healthcare Sector Report for 2021

NVTA shares were trading at $28.13 per share on Tuesday morning, down $0.16 (-0.57%). Year-to-date, NVTA has declined -32.72%, versus a 18.00% rise in the benchmark S&P 500 index during the same period.

About the Author: Aditi Ganguly

Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
NVTAGet RatingGet RatingGet Rating
OPKGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com

Is This REALLY a Bull Market?

The S&P 500 (SPY) keeps making record highs...but does that mean that market conditions are truly bullish? 44 year investment veteran shines a light on how hollow recent gains are as they are only accruing to a handful of stocks with most investors searching high and low for stock market gains. Read on for more...

Unveiling Adobe (ADBE) Q2 Earnings: What Lies Ahead for Investors?

Software giant Adobe Inc. (ADBE) has released its second-quarter earnings, revealing double-digit growth in both revenue and profits. Yet, concerns arise around the complexities of navigating growth in the face of advancing AI technologies. Let’s analyze ADBE’s recent performance and assess key fundamentals to uncover what lies ahead for investors…

3 AI Stocks to Invest in for the Next Technological Revolution

The AI market is experiencing a significant growth trajectory, driven by widespread application across various industries. Hence, it could be wise to invest in top AI stocks, Alphabet (GOOGL), Meta Platforms (META), and Alibaba Group Holding (BABA) for the next technological revolution. Read more...

Analyzing Broadcom’s (AVGO) Q2 Earnings: Worth Investing?

Driven by a surge in demand for its AI products, Broadcom (AVGO) reported robust earnings in its latest quarterly results, exceeding expectations on both top and bottom lines. However, is the stock’s recent announcement of a 10-for-1 stock split worth investing in? Keep reading to find out…

Bullish or Bearish Stock Set Up?

The S&P 500 (SPY) record highs sounds pretty darn bullish on the surface. Yet as we dig below the surface there are some curious signals that point more Risk Off. This is especially true as we come into the next Fed meeting after a round of data that points to inflation still being too high...only further delaying the first rate cut. What does this all mean for stocks from here? Steve Reitmeister offers his latest views on the market outlook along with a preview of his top picks to stay on step ahead of the market. Read on for more...

Read More Stories

More Invitae Corporation (NVTA) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All NVTA News