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Health care stocks resilient but not immune to darkening economic horizon

Most major listed healthcare groups saw a fall in their share prices over the course of the first half of 2022, likely due at least in part to the ever-more-imminent prospect of global recession. The sector hasn’t suffered as badly as some others, however.

Click on a company name under the graph above to turn plotting for it on or off.

Eight of the 14 above groups saw relatively modest falls, ranging from 3% to 25%. The outliers are French elderly care groups Korian and Orpea, and multinational hospital and outpatient and labs group Medicover, which all saw their share prices fall by half or more, and emerging market hospital groups Mediclinic and Bumrungrad, which both saw their share prices increase by around a third.

Korian and Orpea both saw such large falls due to the scandal surrounding accusations of maltreatment in Orpea’s French elderly care homes, and Medclinic’s share has been retreating from its spike last year due to Covid testing windfalls.

Healthcare stocks haven’t been battered as badly as some other sectors. For comparison, the above infographic includes the tech-heavy Nasdaq Composite, which is down 27% from the start of the year. On the other hand, the Euronext top 100 index (also included) is only down 14.5%, about the average healthcare fall (suggesting healthcare is performing roughly averagely compared to the stock market as a whole).

Price-earnings (PE) multiples are also down for almost all groups (hospital groups Life and Ramsay being the only two exceptions).

We would welcome your thoughts on this story. Email your views to Martin De Benito Gellner or call 0207 183 3779.