Health tech is set to boom after coronavirus and these stocks will be the winners, SVB Leerink says

Published Thu, Apr 16 20207:33 AM EDTUpdated Fri, Apr 17 20203:21 PM EDT

Jesse Pound @/in/jesse-pound @jesserpound

(This story is for CNBC Pro subscribers only). Health-care technology is a smart space for investors to hide out from the coronavirus crisis and an industry poised for future growth, with revenues possibly doubling in the near term, according to a new note from SVB Leerink. "We believe 2020 will be a battleground year for the healthcare landscape on both post-COVID-19 recession fears and headline risk surrounding the election. In this context, we view HCIT (Health care information technology) as a bomb shelter for the broader healthcare landscape," the note said. The secular growth trends for the the industry should fuel growth after the crisis, SVB Leerink said, naming Teladoc and Livongo Health as its top picks in the space. "We look to TDOC and LVGO as the two sleep-easy names within our coverage universe, with low risk to the downside and potential upside to estimates," the note said. "Further, TDOC and LVGO do more than merely weather the storm—both are pure plays on secular consumer-driven trends (telehealth and chronic condition management), offering top quartile growth independent of macro." Teladoc has been a popular pick on Wall Street as the coronavirus crisis has led to a surge of digital medical visits to avoid using hospital space. The stock has soared this year, doubling since the start of January. SVB Leerink calls the stock a "clear winner" in the growing shift to more virtual health care and gives it a price target of $180 per share, about 5% above where trading closed on Wednesday after a 9% surge. Livongo is a chronic condition management company that has a subscription platform with 93% retention, according to the note. SVB Leerink has a $49 per share price target on the stock, 27% above where shares closed Wednesday. Health care IT company Cerner is another good bet for investors looking for safety, the note said. The stock has a market cap of about $20 billion and is down roughly 7% for the year, easily outperforming the broader market. SVB Leerink has a $78 price target on the stock, more than 14% above where shares closed Wednesday.