Credit Suisse's Scott Fidel upgraded Aetna and Humana to outperform from neutral three days after the election, saying the stocks would benefit from more favorable funding for Medicare Advantage.
"The GOP under a President Trump will likely look to roll back some of the most problematic insurance market reforms of the ACA, permanently repeal the highly onerous health insurance tax, and create a more favorable pathway for profitable growth in Medicare Advantage," Fidel said in the note.
He also upgraded WellCare Health Plans to neutral from underperform, and downgraded health-services stocks Centene and LifePoint Health to neutral and Molina Healthcare and Community Health Systems to underperform.
"Because the plan for replacing the (Affordable Care Act) is not fully developed, Republicans are likely to repeal the ACA, but delay the effective date for, say, 18 months. This will create a deadline for the replacement plan to be enacted," Daniel Clifton and other Strategas analysts said in a Nov. 22 note.
The analysts said in the report that the Republicans would likely replace subsidies with a refundable tax credit, create a high-risk pool for the most chronically ill patients and repeal the employer deduction for health-care costs.
Strategas' Republican portfolio health-care holdings include biotechnology firms Alexion Pharmaceuticals, Vertex Pharmaceuticals, Amgen and Celgene, as well as pharmaceutical company Pfizer, health equipment company Boston Scientific and health services firm Express Scripts.
Democrat presidential candidate Hillary Clinton had been an outspoken critic of exorbitantly high drug prices, and biotech stocks had fallen sharply as she appeared poised to win the election.
Goldman Sachs' David Kostin also expected health-care equipment and services to do well under a Trump presidency but said drug companies would remain under pressure.
"While near-term drug stocks may benefit from a relief rally, we still expect that drug pricing may remain a bipartisan issue and any changes to Obamacare may be drawn out," Kostin wrote in a Nov. 9 note, one day after the election. "New regulations targeting drug pricing and the cost of the Affordable Care Act (ACA) legislation (a/k/a 'Obamacare') will pressure revenues of Pharmaceutical and Biotech firms while increased utilization will continue to benefit Medical Equipment and Services companies."
"Health Care Equipment & Services is one of the few slices of the U.S. market that has demonstrated a statistically significant relationship with changes in presidential election odds," he said in the report.