Bristol-Myers tops growth chart among S&P 500 healthcare stocks in Q3

The Health Care Select Sector SPDR Fund ETF (NYSEARCA:XLV), tracking the healthcare companies under S&P 500, rose 6.27% in the third quarter of 2024, ahead of the broader S&P 500 index which rose 5.25%.

Top 5 S&P 500 healthcare performers in Q3:

Bristol-Myers Squibb (BMY) +30.78%

Solventum (SOLV) +30.43%

HCA Healthcare (HCA) +26.82%

ResMed (RMD) +26.09%

Waters Corporation (WAT) +25.96%

Bristol-Myers (BMY) saw the biggest growth in the S&P 500 healthcare index, rising about 31% as its recent approvals, Karuna Therapeutics acquisition and strong oncology portfolio helped boost the stock.

Bottom 5 S&P 500 healthcare performers in Q3:

Moderna (MRNA) -45.39%

DexCom (DXCM) -41.33%

Edwards Lifesciences (EW) -28.64%

Humana (HUM) -25.44%

Walgreens Boots Alliance (WBA) -24.81%

Moderna (MRNA) was the biggest loser in the healthcare index for the quarter, as its decision to cut R&D spending and an overall uncertainty on the company’s outlook has spooked investors. The company was also the most shorted stock in the months of July and August.

The overall sector saw a gradual rise through July but saw a slight dip in August beginning, before gradually rising through August end. September has seen a mixed movement in the sector.

Industries Q2 performance

The Health Care Equipment & Services sector rose 8.95% in the third quarter of the year, while Pharmaceuticals, Biotechnology and Life Sciences rose 4.41% in the quarter.

The healthcare-focused ETF (XLV) had a net flow of $454.01M in the quarter.

What Analysts Expect

SA analyst Mike Zaccardi believes that the healthcare sector is outperforming in the second half with a positively sloped 200-day moving average and bullish momentum indicators. “The Health Care sector has been among the winning areas of the stock market in recent months as some steam has been let out of the mega-cap growth trade. What makes the Health Care Select Sector SPDR ETF interesting is that its largest component, Eli Lilly (LLY), often acts like the Magnificent Seven stocks.”

Zaccardi further adds, “Seasonally, we are getting very close to a particularly bullish period of the year. Historically, October and November are XLV’s best back-to-back months when scanning the past 10 years of return history. So, amid a modest pullback, the next handful of trading days could set up well for gains into the end of 2024.”

Seeking Alpha analysts recommend a Buy for the XLV Fund.

What Quantitative Measures Say

XLV has a Hold rating from Seeking Alpha’s Quant Rating system with a 2.55 score out of 5. This comes largely from an A+ in liquidity and dividends, A in expenses, countered by a C- in Risk and Momentum.