Healthcare Stocks Outlook 2025: Should You Invest?

In this Market Mondays Medium #6 clip, Rashad Bilal, Troy Millings, and Ian Dunlap dive deep into the volatile world of healthcare stocks and whether the sector is positioned for a rebound in 2025. The team breaks down why healthcare has struggled, from overseas pharmaceutical tariffs and lawsuits to the misconception that healthcare can match tech stock returns. With new tariffs on international pharmaceuticals and litigation like the Ozempic lawsuit shaking the industry, there’s plenty to consider before adding healthcare stocks to your portfolio. Ian Dunlap shares his take on the sector’s future, noting that expecting “tech-like returns” from healthcare was a major mistake. The discussion covers key American companies—including Eli Lilly, Johnson & Johnson, ABBV, UnitedHealth, Abbott, Merck, and Stryker—highlighting those with strong policy support and innovative biotech advances. Troy Millings points out the disruptive potential of AI in healthcare, emphasizing that upcoming breakthroughs and administration policy will play a significant role. The hosts unanimously stress the importance of focusing on top American healthcare companies, especially given the implications of domestic manufacturing and tariffs. They recommend using healthcare ETFs like XLV to monitor top allocations and add stability to your portfolio. For those wondering if healthcare belongs in their investment mix, the consensus is clear: exposure to healthcare is wise, especially if you stick with sector leaders. Ian narrows his top picks to Eli Lilly, ABBV, and Stryker. However, don’t expect dramatic 35-45% returns as you might with tech; healthcare provides steady, long-term opportunities rather than quick wins. Whether you’re a seasoned investor or new to the stock market, this clip provides actionable insights and a grounded outlook on what to expect from healthcare stocks in the coming year. If you’ve wondered about CVS, United Healthcare, or how U.S. healthcare spending compares globally, the crew covers that too—reminding us that, despite being one of the largest markets, the U.S. still lags in health outcomes. *Key Takeaways:*

• Healthcare sector’s challenges in 2024, including tariffs and lawsuits
• Realistic returns vs. tech sector expectations
• American healthcare companies to watch: Eli Lilly, ABBV, Stryker
• How AI and biotech innovation could accelerate sector growth
• The impact of U.S. policy and tariffs on investment choices
• Using healthcare ETFs (like XLV) for strategic exposure
• Why healthcare should (or shouldn’t) be part of your portfolio

If you want honest, in-depth analysis of the healthcare market and a roadmap for making informed investment decisions in 2025, this is the clip you can’t miss. Like, subscribe, and let us know your thoughts on the future of healthcare stocks in the comments! #HealthcareStocks #MarketMondays #Investing #EliLilly #ABBV #Stryker #TechVsHealthcare #Tariffs #AIinHealthcare #StockMarketAnalysis #ETFs #PortfolioStrategy

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:01):
This episode is brought to you by P and C Bank.
A lot of people think podcasts about work are boring,
and sure they definitely can be, but understanding of professionals
routine shows us how they achieve their success little by little,
day after day. It's like banking with P and C Bank.
It might seem boring to save, plan and make calculated

(00:21):
decisions with your bank, but keeping your money boring is
what helps you live or more happily fulfilled life. P
and C Bank Brilliantly Boring since eighteen sixty five. Brilliantly
Boring since eighteen sixty five is a service mark of
the PNC Financial Service Group, Inc. P and C Bank
National Association Member FDIC.

Speaker 2 (00:43):
It's been a very rocky road so far for healthcare stocks,
so do you think that the sector will perform better
next year? We can talk about the teriffs in phases.
I know that's overseas pharmaceuticals is one of the things
that Trump put tariffs on, so I believe it's fifty

(01:06):
on overseas pharmaceutical one hundred hundred, one hundred percent of
overseas pharmaceutical and then of course the Olympic lawsuit, so
there's been a lot of hot profile things that have
hurt healthcare stocks. Don't talk about Eli Lily a lot,
but uh yeah, what's the what's the forward projection for

(01:26):
healthcare stocks?

Speaker 3 (01:28):
I think the healthcare sector will be okay, but one
of the biggest mistakes was the sector trying to price
in healthcare returns to match tech returns. So if you
look even Atli Lily from twenty twenty one, which is
at two oh one seventy eight, it ballooned up to
nine seventy two fifty three.

Speaker 4 (01:50):
I love Lily dearly. I think it's one of the
most important companies in.

Speaker 3 (01:53):
Healthcare, but if I had to ask you, just okay,
is it more important than the video, Microsoft and Meta?
The price gaps became too wide, and I think they
began to adjust to prices where they should be.

Speaker 4 (02:06):
Novos had their issues.

Speaker 3 (02:08):
We've always talked about it investing into stocks that are
domestic and not international first.

Speaker 4 (02:14):
So I think as a result, the sector will be fine.

Speaker 3 (02:17):
But if you're looking for high price returns, the only
places you really can turn to are bitcoin, which is
a tech, and then tech sectors and maybe some energy
trow We can talk about Apple loving later, but I
think all in all, even with like United Healthcare, the
margin structures are dramatically different than a tech company. So

(02:40):
I think it's a mistake at times to try and
get the same kind of returns that that sector.

Speaker 4 (02:45):
Normally does not give.

Speaker 3 (02:46):
Well, next year be a little bit better, yes, but
I don't think you should expect thirty five to forty
five percent return and healthcare at all.

Speaker 1 (02:54):
Yeah, I don't think you should ever expect that type
of return. If you're in the right place at the
right time, it can happen. Healthcare is interesting. I think
it's kind of one of these things where you have
to see a breakthrough and it has to be something
that has strong right, it has to be something with
strong policy behind it. There's a lot of different variations

(03:14):
of factors that go into making a healthcare stop something
that is worth investing in.

Speaker 4 (03:20):
The interesting part is that.

Speaker 1 (03:23):
AI is going to disrupt health care, and so there
could be right it could help it at scale, and
so we could see innovations in biotech. I think we're
not We're not far from that, right. Like I talked
about this yesterday where Latinet was saying that ten years ago,
every company on the stock market is a tech company
because it needs a tech component.

Speaker 4 (03:43):
Yep.

Speaker 1 (03:44):
And last week he said every company is going to
be an AI company because it has to have an
AI component, and healthcare is not excluded from that. So
innovation will happen how fast? I think it can happen quickly,
And if you look at what this administration, especially when
when you talk about tariffs, and that's even an interesting
proposition in itself, right, Like the tariffs only go into

(04:07):
effect at one hundred percent if you're not building a
plant inside of the United States, and so that's like,
I mean, you're trying to incentivize people to build infrastructure
here from the pharmacide. But if they do, then there
are no tariffs, right for those companies. I think you
focus on if you're investing in healthcare. I think you're
focusing on the American companies that have been leading, starting

(04:32):
with Lily Johnson and Johnson. I think the best thing
to do, right, and we talked about it last week,
is go look up these these healthcare ETFs and see
what the allocation. Yeah, right, if we look at the Spiderfund XLV,
Lily Johnson and Johnson, ABBV, United Health, ADVOD, MERK I
used to talk about Thermo official all the time during
the pandemic. We're talking about how we're going to get

(04:52):
vaccines and that business is going out the window. Right.
We talked about what happened. What's happened to Mark you
can see as well. Yeah, American companies. If that is
what the administration is leaning towards. To me, like I said,
you have to have strong policy behind you, I would
keep an eye on the top five in XLV uh

(05:13):
and and put on my watch list. I definitely any Striker.
I think we can put Striker in there, right, Yeah,
that's always being of my favorites in terms of healthcare,
Lily for sure. But keep them on your watch list, Lily.
Obviously it will be the leader. And that has a
lot to do with not just the the weight loss drugs,
I mean their entire portfolio. But be mindful of the

(05:33):
ones that are getting policy behind you.

Speaker 3 (05:35):
The only three I like in the space. You know, Lily,
of course, ABBV and Striker. You're not You're not a
healthcare until I get a new CEO and this trial
is over with.

Speaker 4 (05:50):
Oh that's trial.

Speaker 1 (05:51):
Yeah, yeah, that's right, Yeah.

Speaker 4 (05:56):
Yeah, rabbit hole, you know.

Speaker 3 (06:02):
You trying to get canceled this weekend or no, we
go deep down the rabbit hole and wrap it up.
Got you, Okay, I'm always down to get canceled. Hello,
when you invest well investment in Vesco?

Speaker 2 (06:16):
M hm, you're not getting canceled.

Speaker 4 (06:20):
What are you doing? We can crash out day whenever
you want to.

Speaker 2 (06:25):
I'm always down for a crash out, She said, what
about CVS.

Speaker 1 (06:31):
I've spoken highly about CVS, and if you've invested in CVS,
you've so great returns on that as well.

Speaker 4 (06:35):
I like CVS too.

Speaker 2 (06:37):
So for people that you know. Obviously, healthcare is the
number one expenditure of the United States government, essentially the
biggest industry in the world. Should people have healthcare as
part of their portfolio?

Speaker 4 (06:50):
Yeah, only literally, abbv Instrucker.

Speaker 3 (06:53):
The other part that's unfortunate is that we spend all
this money on healthcare, but we are one of the
sicker major countries in the world, so it's not for
our benefit per se.

Speaker 4 (07:08):
Do I think there's great leadership Lily, yes, Abbv Yes.

Speaker 3 (07:11):
Striker, Yes, I think even United Healthcare has a chance
to turn itself around. But the mistake was because at
one point when Novo was taken off, The thought was
what if we can get healthcare returns to look like tech.
And that's when you started putting our drugs and overqualifying
them and overstating with the benefits who could be we're

(07:34):
out looking at the.

Speaker 4 (07:35):
Risk and that destroyed Novo's business.

Speaker 3 (07:37):
So exposure is great for sure, but those are the
freak three that I will leave into ernest.

Speaker 4 (07:44):
What's up? Look?

Speaker 1 (07:45):
This episode is brought to you by Square Banking. One
of the things we love most is seeing neighborhood businesses
level up. This this West Indian spot right in our
community that started with a small takeout counter. Now with
Square they've been able to expand and to a full
sit down restaurant and even started catering events across the city.
That's the kind of growth that inspires us, and it's

(08:07):
powered by Square. Square is built for all types of businesses,
from the corner bagel shop that turned into a local chain,
to the specialty market with thousands of unique items, to
the stylists who's been holding you down. For years. With
Square Banking, growth gets easier. You've got more control over
your cash flow, access to capital right in the same

(08:28):
system you're already using to run your business, and with
a free Square Savings account, you can automatically set aside
a portion of your sales for upgrades, taxes, and those
slow seasons, setting yourself up for long term success and
when it's time for the next big move. Square makes
it simple to get approved with a Square loan based

(08:48):
on your actual business performance. No long ways, just quick
access to capital. In fact, eighty eight percent of businesses
with Square loans report growth. So go to Square dot com,
slash go, slash e y l to learn more about
how your business can grow with Square. That's s q
U a r e dot com, slash g O, slash

(09:12):
e y L. Block Inc. Is not a bank. Banking
services provided by Square Financial Services, Inc. And certain bank members.
F D I C loans are subject to credit approval