Citi turns cautious on pharmaceuticals and biotech
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Citi said Tuesday that it is underweight most of the healthcare sector, including pharmaceuticals and biotech. The firm attributed its caution to earnings and revenue trends in the sector.
âPharmaceuticals, Biotechnology & Life Sciences is lowered to UW [Underweight]," Citi stated in a note to clients. "Although PEs have improved, in contrast to E&S, sales and earnings trends have inflected lower."
While Citi is underweight Health Care in general, it does hold a market weight stance on health care equipment & services.
"Health Care Equipment & Services moves up to MW [Market Weight]. Despite margin weakness, earnings trends have been surprisingly positive. Valuations, per PEs, are increasingly supportive. A recent oversold condition is alleviating," Citi stated.
Citi also listed some of its Buy and Sell rated stocks by ETR. Some names included the likes of Insulet Corp (PODD), Dexcom (DXCM), and Bristol-Myers Squibb Co (BMY). See the complete list below:

For reference:
ETR refers to the estimated total return. Regarding the rating system, 1 is Buy, 2 is Hold, 3 is Sell - 1H is less conviction Buy than 1 but more than 2.
Meanwhile, here are handful of health care exchange traded funds along with how they have fared in 2023:

Health Care Select Sector SPDR Fund (NYSEARCA:XLV) -6.2%.
Vanguard Health Care ETF (VHT) -6.1%.
Invesco S&P 500 Equal Weight Health Care ETF (RSPH) -6.4%.
iShares Biotechnology ETF (NASDAQ:IBB) -8.3%.
SPDR S&P Biotech ETF (NYSEARCA:XBI) -14.2%.
ARK Genomic Revolution ETF (BATS:ARKG) -4.4%.


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