巴克莱-美股-医疗用品与设备行业-COVID19影响下的美国医疗用品与设备行业-317-30页.pdf
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Equity Research
17 March 2020
CORE
Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with
companies covered in its research reports. As a result, investors should be aware that the
firm may have a conflict of interest that could affect the objectivity of this report. Investors
should consider this report as only a single factor in making their investment decision.
PLEASE SEE ANALYST CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 23.
Restricted
- Internal
U.S. Medical Supplies & Devices
COVID-19: Puts & Takes; ISRG-Get
Ready for Some More ‘Warning Flags’
The novel coronavirus (COVID-19) global pandemic is now rapidly spreading through
Europe and the U.S. Efforts are underway to “delay and flatten the curve.” The federal,
state, and local governments are taking actions to address COVID-19, some of which
include canceling/postponing elective procedures – which we highlighted in past
research reports (and discuss below in greater detail).
ISRG-Last night: A ‘warning flag’: Last night after market close, Intuitive Surgical (ISRG;
not covered) issued an 8K commenting on the impact of COVID-19. ISRG has seen an
impact but the regions do not represent a material portion of procedure volumes.
HOWEVER, management noted the spread of COVID-19 to the larger EU and US
regions, and when combined with the recent recommendations by the American
College of Surgeons (Friday) the Surgeon General (Saturday) and advising the
deferral of elective procedures, there could be a material impact ahead. Moreover,
restrictions on travel, access to customers, temporary closures of its facilities or of its
suppliers or contract manufacturers could also materially impact results.
Unfortunately, we believe this is just the start: We expect more companies to possibly
preannounce or warn, referencing the new recommendations, and/or “pull” their
guidance for the balance of the year in light of the unprecedented uncertainty.
What’s inside this report…
MedTech COVID-19 takeaways from the Barclays Global Healthcare Conference.
We discuss the American College of Surgeons and U.S. Surgeon General’s
Recommendation to cancel elective procedures.
We review State, Health System, and Hospitals that have taken actions to limit
elective procedures (and other actions that are relevant to Medical Devices
including their commentary regarding building out of new beds).
We review what are elective procedures and discuss product mix of each company.
We review what products could be used in the COVID-19 efforts and the companies
that manufacture such products.
Stock views
We upgraded HRC to Overweight on March 17. We estimate at least 40% of sales
(e.g. the rental beds and legacy Welch Allyn products such as thermometry, patient
monitoring, blood pressure, physical examination) could benefit from COVID-19. In
addition, Hillrom’s acute care frame’s business (20%-25%) could benefit to the
extent there are additional beds added to systems.
We view JNJ and ABT (Overweight) as “beacons of safety” in these turbulent
markets given their diversified businesses, balance sheet strength, and cash flows.
We continue to rate MDT and BSX Overweight as we believe that when the market
returns to fundaments, product cycles should matter again. In the case of MDT, the
company also has a strong balance sheet, cash flows, and a dividend.
INDUSTRY UPDATE
U.S. Medical Supplies & Devices
NEUTRAL
Unchanged
U.S. Medical Supplies & Devices
Kristen Stewart, CFA
+1 212 526 6965
kristen.stewart@barclays.com
BCI, US
Benjamin Weaver
+1 212 526-1961
ben.weaver@barclays.com
BCI, US
Josiah Hannon
+1 212 526 4155
josiah.hannon@barclays.com
BCI, US
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