Goldman Sachs: The healthcare sector as a whole is facing challenges, but there are still opportunities for "gold mining" in the sector.

Goldman Sachs Group, Inc. strategist David Kostin stated that the decline in the healthcare sector has created opportunities for stock pickers, but the sector is unlikely to see an overall rise. So far this year, the healthcare sector (XLV) has underperformed the S&P 500 index by 8 percentage points and is expected to lag behind the market for the third consecutive year. Even excluding the impact of mega-cap tech stocks, the sector's valuation discount relative to broad market indices is close to historical extremes. Kostin pointed out that while the low valuation implies potential upside, robust economic growth, the artificial intelligence boom, and policy uncertainties may limit the sector's overall performance. On the contrary, he believes that "alpha opportunities greatly exceed beta returns" and points out that the widening return differential and active M&A activity in the healthcare industry will be driving factors for selected stocks. In Goldman Sachs Group, Inc.'s M&A concept stock portfolio, nearly half are healthcare companies, and the firm expects M&A activity to continue to grow into next year. At the individual stock level, Goldman Sachs Group, Inc. has selected some healthcare stocks from the Russell 1000 index, all of which have recently had their 2026 earnings per share forecasts upgraded by institutions, with current valuations below historical levels. Here is the specific list selected by Goldman Sachs Group, Inc.: Jazz Pharmaceuticals Public Limited Company (JAZZ.US), Insulet Corporation (PODD.US), Solet Health (SHC.US), Incyte Corporation (INCY.US), Regeneron Pharmaceuticals, Inc. (REGN.US), BioMarin Pharmaceutical Inc. (BMRN.US), Universal Health Services (UHS.US), Doximity Inc. (DOCS.US), Neurocrine Biosciences (NBIX.US), Vertex Pharmaceuticals Incorporated (VRTX.US), Illumina Inc. (ILMN.US), West Pharmaceutical Services (WST.US), DaVita Inc. (DVA.US), Edwards Lifesciences Corporation (EW.US), Eli Lilly and Company (LLY.US), Zimmer Biomet Holdings (ZBH.US), Penumbra Inc. (PEN.US), Envista Holdings Corporation (NVST.US), Medtronic Plc (MDT.US), Veeva Systems (VEEV.US), Masimo Corporation (MASI.US), Pfizer Inc. (PFE.US), Thermo Fisher Scientific Inc. (TMO.US), ResMed Inc. (RMD.US), Bio-Rad Laboratories (BIO.US), Certara (CERT.US), Align Technology, Inc. (ALGN.US), Charles River Laboratories International, Inc. (CRL.US), Hologic Inc. (HOLX.US).