After the close today, Coventry Health Care slashed its Q2 and full-year earnings guidance due to increasing cost pressures. Coventry’s stock was halted after hours before starting again. Meanwhile, other healthcare stocks are trading sharply lower in after hours trading following the news.
In after hour trading today...
Aetna - 8%
Wellpoint - 5%
United Health -5%
Note that Coventry also lowered its Q1 and full-year guidance back in March (as did some of the other healthcare stocks too) – causing sell-offs in the healthcare stocks. As a result, the healthcare group is already one of the weakest sectors this year. The Morgan Stanley Healthcare Index is one of the worst-performing sectors on the year (-32% YTD). As a comparison, airlines are down 49% YTD and banks are down 29%.
Here is how some of the major healthcare stocks have performed this year (not taking into account the declines after the bell today):
United Health -48%
Coventry Health -32%
Should be an interesting day tomorrow for these stocks…