U.S. equities are mostly higher in post-holiday trading on Tuesday, as investors are looking for stocks to buy. They’re largely shrugging off a litany of concerns such as a falling long-term Treasury rates, U.S.-China trade tensions, Italian debt worries, and the rise of populist political parties in Europe following over-the-weekend elections.
Instead, investors seem to be focusing in on specific news events affecting individual sectors. Healthcare stocks, in particular, are getting some attention as Johnson & Johnson (NYSE:JNJ) faces off against Oklahoma in the first-of-its-kind opioid epidemic lawsuit. This comes with the company fresh off of its fight over talcum powder. Accusations of links to ovarian cancer resulted in billions in judgments.
Shares of JNJ, along with a number of other related healthcare stocks, are surging higher in what looks like a buy-the-news opportunity as defensive stocks in general enjoy a bout of relative outperformance:
Johnson & Johnson (JNJ)
As mentioned, the company is facing a multi-billion-dollar lawsuit from the state of Oklahoma. The suit is aimed at pinning the blame for the opioid epidemic on the marketing of its painkillers. Lawyers for both sides made their opening arguments in state court today in what is the first of more than 2,000 similar lawsuits nationwide. Despite this, coverage of the stock was recently initiated by Goldman analysts, who assigned a buy rating.
The company will next report results on July 16 before the bell. Analysts are looking for earnings of $2.40 per share on revenues of $20.4 billion. When the company last reported on April 16, earnings of $2.10 beat estimates by six cents on a 0.1% rise in revenues.
Shares of Pfizer (NYSE:PFE) are challenging downtrend channel resistance near the $42.50-a-share level, pushing up and over its 200-day moving average. Watch for a run to its December high, which would be worth a gain of more than 8% from here. The FDA recently approved its Fragmin injection for pediatric patients fighting blood clots.
The company will next report results on July 30 before the bell. Analysts are looking for earnings of 75 cents per share on revenues of $13.3 billion. When the company last reported on April 30, earnings of 85 cents per share beat estimates by 10 cents on a 1.6% rise in revenues.
Shares of drugmaker Merck (NYSE:MRK) are rallying above their 50-day moving average to close in on their early April highs. Coverage of the stock was recently initiated by Goldman analysts, who assigned a neutral rating. Earlier in the month, the stock was upgraded to overweight by analysts at Atlantic Equities. Merely a return to the early April high would be worth a 4% gain from here.
The company will next report results on July 30 before the bell. Analysts are looking for earnings of $1.15 per share on revenues of $10.9 billion. When the company last reported on April 30, earnings of $1.22 per share beat estimates by 17 cents on a 7.8% rise in revenues.
Boston Scientific (BSX)
Shares of Boston Scientific (NYSE:BSX) are rising off of support near their 50-day and 200-day moving averages, breaking free of a four-month consolidation range to rally towards the February/March high and a possible push to new record highs. Shares were recently upgraded to buy by analysts at Evercore ISI.
The company will next report results on July 24 before the bell. Analysts are looking for earnings of 38 cents per share on revenues of $2.6 billion. When the company last reported on April 24, earnings of 35 cents per share missed estimates by a penny on a 4.8% rise in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.