Health Care Stocks with Potential for Growth in 2024
As we kick off the new year, health care stocks are already showing promise for investors. According to Jefferies, some of the lesser-known names in the health care sector could outperform as the Federal Reserve cuts rates. The S & P 500 health care sector is on track for its best year since 2021, with a gain of over 6%. Leading the charge are companies like Eli Lilly and DaVita, which have seen their stocks soar over 30%. However, Jefferies believes there are opportunities beyond the big names in health care, pointing to small- and mid-cap stocks that could see gains of 30% to 45%.
Jefferies has identified these hidden gems in the health care sector that are not widely followed by analysts or the broader market. These companies, with fewer than 15 analysts covering them, have the potential to outperform the market this year. The health care sector has also been buoyed by record levels of mergers and acquisitions in 2024, and historically performs well in the face of interest rate cuts from the Fed.
One of the companies that Jefferies believes has potential for growth is pharmaceutical firm Incyte. Despite a dip in shares this year, Jefferies maintains a $81 per share price target on Incyte, predicting a 38% upside from Monday’s close. Analysts are optimistic about Incyte’s prospects in the dermatology market and the potential regulatory approval of their eczema treatment for other conditions.
Another company to watch is Staar Surgical, specializing in implantable collamer lenses for refractive eye surgery. Jefferies has set a $50 per share price target for Staar Surgical, representing a 31% upside from current levels. Analysts are bullish on the company’s long-term potential in treating myopia and their growth outlook for 2024.
As the year unfolds, these lesser-known health care stocks could be worth keeping an eye on for investors seeking growth opportunities in the sector. With the potential for mergers and acquisitions, interest rate cuts, and strong growth prospects, these hidden gems could shine bright in 2024.
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