Senate Democrats recently proposed $21 billion in new funding for COVID-19 — here are 3 health care stocks that could make it

Senate Democrats recently proposed $21 billion in new funding for COVID-19 — here are 3 health care stocks that could make it

The healthcare sector received a lot of attention from investors during the early days of the COVID-19 pandemic. Interest in space has waned a bit in recent months, but a new catalyst may be on the way.

Top Senate Democrats recently proposed a new $21 billion emergency bill to prepare for the next phase of the pandemic and other emerging diseases.

The bill would allocate $16 billion to the Public Health and Human Services Emergency Fund for testing, vaccines, medical supplies and research. Another $5 billion in emergency funding is aimed at helping other countries fight the coronavirus.

“Our efforts to stop this disease overseas to protect us here at home are quickly running out of funding and we are running out of time to act,” Senate Appropriations Committee Chairman Patrick Leahy said in a statement.

The bill could give investors a new reason to scrutinize companies that make vaccines, develop treatments or manufacture antigen tests. Here’s a look at three of them.

Dont miss

Pfizer (PFE)

With a history that can be traced back to 1849, Pfizer is a large-cap pharmaceutical and biotechnology company. The pandemic made it even more famous worldwide.

Over 3.6 billion Pfizer-BioNTech COVID-19 vaccines have been shipped to 180 countries worldwide. Meanwhile, Pfizer is also the maker of Paxlovid, an oral antiviral pill used to treat COVID-19.

The company reported strong results this earnings season. For the second quarter, Pfizer generated revenue of $27.7 billion, representing a 47% year-over-year increase. Adjusted earnings per share were $2.04, up 92% from the year-ago period.

The stock, however, is not immune to the market selloff in 2022. Year-to-date, Pfizer shares are down 13%.

JPMorgan analyst Chris Schott has a “neutral” rating on Pfizer and a price target of $57 — about 15% above where the stock sits today.

Gilead Sciences (GILD)

Gilead Sciences is another biopharmaceutical company that made headlines during the pandemic. It is the maker of Veklury (remdesivir), the first antiviral drug approved by the FDA to treat COVID-19 requiring hospitalization.

The company announced second-quarter earnings earlier this month. For the quarter, revenue rose 1% year over year to $6.3 billion. Adjusted earnings per share fell 13% year over year to $1.58.

While those numbers don’t look impressive on their own, they beat Wall Street’s expectations. On average, analysts were expecting Gilead to report earnings of $1.52 per share on revenue of $5.86 billion for the quarter.

The management also strengthened their guidance. For the full year 2022, they expect the company to earn $24.5 billion to $25 billion in total product sales, up from their previous guidance range of $23.8 billion to $24.3 billion.

The stock soared after the earnings announcement. However, it is still down 10% year to date.

Piper Sandler analyst Do Kim recently reiterated a “neutral” rating on Gilead while raising his price target from $71 to $74. Considering that Gilead is trading at around $65 today, the price target implies a potential upside of 14%.

Abbott Laboratories (ABT)

Abbott Laboratories is a healthcare company specializing in medical devices, diagnostics, nutritional products and branded generic drugs.

Like the other two companies, Abbott hasn’t been hot. Its shares have fallen a painful 21% in 2022.

But the company is firmly positioned for another wave of COVID-19 – it makes testing kits for COVID-19.

According to the latest earnings report, sales related to COVID-19 testing totaled $2.3 billion for Abbott in the second quarter of 2022.

Sales totaled $11.3 billion for the quarter, representing a 10.1% year-over-year increase. Adjusted earnings per share rose 22.2% from a year ago to $1.43.

Management expects the company to earn $6.1 billion in sales related to the COVID-19 tests for the full year 2022.

Citi analyst Joanne Wuensch has a “buy” rating on Abbott and a price target of $123 — about 12% above current levels.

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