Analysts at Barclays took action on large health care stocks on Tuesday.
Barclays Plc (BCS, Financial) initiated coverage of Abbott Laboratories (ABT, Financial), Boston Scientific Corp. (BSX, Financial), Medtronic Plc (MDT, Financial) and Stryker Corp. (SYK, Financial) with an overweight rating. The firm started coverage on Baxter International Inc. (BAX, Financial), Edwards Lifesciences Corporation (EW, Financial) and Zimmer Biomet Holdings Inc. (ZBH, Financial) with an underweight rating. In addition, Barclays initiated coverage on Becton, Dickinson and Company (BDX, Financial) with an equal-weight rating.
The table below shows the price target that Barclays has issued for each of the health care stocks, the percentage of upside/downside that the target price represents from the share price at close on Tuesday, the average target price and the mean recommendation rating as of Tuesday.
| Stock | Barclays’ TP | upside/downside | mean recommendation rating | average target price (number of estimates) |
| Abbott Laboratories | $80 | +12.8% | 1.8 out of 5 | $76.94 (17) |
| Boston Scientific Corporation | $43 | +12.8% | 1.5 out of 5 | $41.57 (23) |
| Medtronic plc | $113 | +17% | 2.2 out of 5 | $103.90 (21) |
| Stryker Corporation | $198 | +13.1% | 1.9 out of 5 | $187.27 (24) |
| Baxter International Inc | $73 | +1.7% | 2.4 out of 5 | $79.79 (14) |
| Edwards Lifesciences Corporation | $143 | -2.7% | 2.3 out of 5 | $161.20 (20) |
| Zimmer Biomet Holdings | $131 | +2.6% | 2.3 out of 5 | $136.92 (24) |
| Becton, Dickinson and Company | $278 | +13.8% | 1.9 out of 5 | $272.44 (16) |
The chart below illustrates the share price at close Tuesday and the change in the market value of each health care stock so far this year. The chart is powered by GuruFocus.
The table below illustrates the market capitalization as of Oct. 16, the 52-week range, the price-book ratio, the price-sales ratio and the price-earnings ratio for each health care stock.
| Stock | Mkt Cap | 52-week range ($) | Price-book ratio | Price-sales ratio | Price-earnings ratio |
| Abbott Laboratories | $124.47B | 53.61 - 74.15 | 4.07 | 4.23 | 141.90 |
| Boston Scientific Corporation | $52.7B | 24.54 - 39.44 | 6.80 | 5.60 | 105.86 |
| Medtronic plc | $130.65B | 76.41 - 100.15 | 2.60 | 4.39 | 41.80 |
| Stryker Corporation | $65.49B | 146.26 - 179.84 | 6.92 | 5.11 | 61.87 |
| Baxter International Inc | $37.86B | 62.52 - 78.38 | 4.32 | 3.61 | 43.23 |
| Edwards Lifesciences Corporation | $30.78B | 100.20 - 175.00 | 9.72 | 8.91 | 48.05 |
| Zimmer Biomet Holdings | $25.98B | 104.28 - 134.55 | 2.16 | 3.29 | 15.44 |
| Becton, Dickinson and Company | $65.37B | 200.08 - 265.87 | 3.06 | 4.18 | 105.30 |
The charts below, which are powered by GuruFocus, compare the share price at close Tuesday with the Peter Lynch Earnings Line (P/E = 15) and the Price at Med P/E without NRI for each health care stock.
Except for Zimmer Biomet Holdings, it appears that the other stocks are overpriced.
In addition, Abbott Laboratories has a forward dividend yield of 1.63%, Medtronic Plc 2.13%, Stryker Corporation 1.11%, Baxter International 1.07%, Zimmer Biomet Holdings 0.78% and Becton, Dickinson and Company 1.26%. For these health care stocks, the industry median is 1.48%.
For Becton, Dickinson and Company, and Baxter International, the industry median is 1.3%.
Boston Scientific Corp. and Edwards Lifesciences Corp. do not pay dividends.
Disclosure: I have no positions in any security mentioned in this article.
