Abbott, Baxter among MedTech favorites at Raymond James for early 2022
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Raymond James has picked Abbott Laboratories (ABT
-2.1%), Edwards Lifesciences (EW
-1.7%), and Baxter International (BAX
+0.3%) as its favorites for early 2022, expecting the group to perform largely unaffected by the resurgence in COVID-19.

âRoller-coasterâ is the term used by the analyst Jayson Bedford to describe the performance of the MedTech space in 2021 when the large-cap stocks outperformed in Q2 and Q3 as COVID-19 waned and unperformed in Q1 and Q4 amid pandemic-related concerns.
The group lagged both the healthcare sector and the S&P for the first time in nine years, the analyst notes as illustrated in this graph.

âOmicron, and the likelihood of deferred procedures will dominate the near-term narrative, which makes for an uncomfortable near-term set-up,â Bedford warns, predicting a conservative early guidance from companies for 2022.
âThis may be in early 2022, but our thought is that the green light starts to shine brighter in 2Q22,â he added, citing his optimism on high vaccination rates, less virulent Omicron, and improvements in hospital management.
While MedTech hovers below its four-year average on a P/E basis for the next twelve months, the uncertainty is more prominent in the near term than in the long-term. However, the analyst does not foresee any structural factors impacting the demand curve for medical devices and argues there is a âsteady tailwind of demandâ from the aging and sicker population.
In addition, the consensus does not reflect the COVID-driven patient backlog, which, according to Bedford, âis effectively a free call option on the group.â
When the current surge subsides, Boston Scientific (BSX
+0.7%) and Intuitive Surgical (ISRG
-0.7%) can offer compelling risk-reward setup, the analyst opined, without ruling out the potential of âother stock-specific opportunities.â
Read: Recently, Raymond James raised the price target for Abbott (NYSE:ABT), expecting the COVID-19 test maker to successfully navigate the latest surge in COVID-19.