{"id":1030376,"date":"2026-06-16T14:55:14","date_gmt":"2026-06-16T14:55:14","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/1030376\/"},"modified":"2026-06-16T14:55:14","modified_gmt":"2026-06-16T14:55:14","slug":"why-healthcare-stocks-are-primed-to-outperform-the-market-2-firms","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/1030376\/","title":{"rendered":"Why Healthcare Stocks Are Primed to Outperform the Market: 2 Firms"},"content":{"rendered":"

Healthcare stocks are typically seen as defensive investments. When things go south for the market, they outperform<\/a>.<\/p>\n

That hasn’t played out this year, with tech once again dictating momentum and pacing gains. The sector is down about 1.5% year-to-date, a period that’s seen the S&P 500<\/a> climb nearly 11%. The tech-heavy Nasdaq 100<\/a> has fared even better, up 21%.<\/p>\n

But despite their defensive traits, healthcare stocks are poised to play a bit of offense, according to two Wall Street firms. In notes to clients this month, both UBS and Franklin Templeton said the sector is set to stage a turnaround.<\/p>\n

Detailed below is the reasoning behind each firm’s bullish outlook.<\/p>\n

UBS<\/p>\n

UBS listed three reasons they like the sector, starting with GLP-1 weight-loss drugs<\/a>. The drugs are a huge growth driver for pharmaceutical stocks, which make up around one-third of the sector.<\/p>\n

“GLP-1 drugs may be creating one of the largest new drug markets in pharmaceutical history,” Ulrike Hoffmann-Burchardi, the bank’s global head of equities, said in a June 8 note, adding: “What started as a treatment for type 2 diabetes has evolved into a global market, with the potential to exceed USD 100bn in revenues by 2030.”<\/p>\n

Second, AI is helping healthcare firms discover new drugs faster. That’s a boon for investors because companies won’t have to spend as long developing the drugs, and will be able to spend less on the research, UBS said.<\/p>\n

And third, the world’s population is aging<\/a>, which will create “inelastic demand” for treatment going forward, the bank said.<\/p>\n

Franklin Templeton<\/p>\n

Franklin Templeton highlighted some similar reasons for upside potential, including AI as a driver for growth. The firm said companies are using the technology to become more operationally efficient, as well as for applications such as surgical robots<\/a> and clinical trials.<\/p>\n

Strong demand \u2014 both right now and down the line \u2014 was another reason Franklin Templeton likes the sector.<\/p>\n

The stocks are also historically cheap, the firm said.<\/p>\n

“Many investors have been putting money into technology stocks, especially those related to AI, instead of health care,” the firm wrote in a June 9 note. “As a result, health care stocks are now priced lower, even though the companies are still performing well. This could make them a good buying opportunity.”<\/p>\n

The MSCI All-World Healthcare Index trades at a 12-month forward price-earnings ratio of 18.5 times, compared to 26.5 for the global tech sector.<\/p>\n

Healthcare companies are also increasingly doing stock buybacks, which boost returns, Franklin Templeton said.<\/p>\n

Examples of funds offering exposure to the healthcare stocks include the Vanguard Health Care ETF (VHT<\/a>), the iShares Global Healthcare ETF (IXJ<\/a>), and the Invesco Pharmaceuticals ETF (PJP<\/a>).<\/p>\n","protected":false},"excerpt":{"rendered":"Healthcare stocks are typically seen as defensive investments. When things go south for the market, they outperform. That…\n","protected":false},"author":2,"featured_media":1030377,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[4316],"tags":[284457,323,3670,1322,6579,17270,31347,284458,105,4348,284456,7036,57082,39461,64127,39771,24275,16,15],"class_list":["post-1030376","post","type-post","status-publish","format-standard","has-post-thumbnail","category-healthcare","tag-year-to-date","tag-ai","tag-bank","tag-company","tag-drug","tag-firm","tag-franklin-templeton","tag-glp-1-weight-loss-drug","tag-health","tag-healthcare","tag-healthcare-stock","tag-market","tag-note","tag-potential","tag-reason","tag-sector","tag-ubs","tag-uk","tag-united-kingdom"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/116760368089574644","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1030376","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=1030376"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1030376\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/1030377"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=1030376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=1030376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=1030376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}