Please ensure Javascript is enabled for purposes of website accessibility

Fitch Ratings Says Impeachment Trial Won't Hurt Healthcare Investment in 2020

By Mark Prvulovic - Updated Jan 24, 2020 at 8:48PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Despite an uncertain political year, the credit ratings agency expects merger activity in U.S. healthcare to continue.

Healthcare markets in the U.S. have a lot to be anxious about in 2020, with federal elections looming while the impeachment trial of President Trump continues to develop. In spite of this, however, top credit agency Fitch Ratings predicts that U.S. healthcare investment will remain strong.

Although healthcare megamergers are likely to slow down a little in 2020, more midsize acquisitions are likely to continue without losing too much steam, according to Fitch. However, M&A activity is likely to be weighted more toward the first six months of the year as opposed to the second half, when the election takes place, the agency says.

An impeachment procedure law book with a gavel and an american flag on a table.

Image source: Getty Images.

Despite the fact that "policy-making activity is important to the long-term outlook for sector cash flow ... we do not expect current uncertainty to upend strategic investment," Fitch analysts wrote in a recently released report.

A strong year for healthcare mergers

The past year has seen a number of significant mergers in the healthcare space. AbbVie's (ABBV -0.51%) whopping $63 billion deal with Allergan, CVS Health's (CVS -0.78%) $69 billion acquisition of Aetna, and Bristol-Myers' (BMY -0.66%) even larger $74 billion deal with Celgene are three of the largest deals made last year.

Healthcare reform has remained a top subject for political candidates. In particular, lowering the cost of drugs was one of the key topics in the previous Democratic debate. Many candidates, such as Sen. Elizabeth Warren, have vowed to use executive action to make it easier for generic drugmakers to compete. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Bristol Myers Squibb Company Stock Quote
Bristol Myers Squibb Company
$75.80 (-0.66%) $0.50
CVS Health Corporation Stock Quote
CVS Health Corporation
$97.48 (-0.78%) $0.77
AbbVie Inc. Stock Quote
AbbVie Inc.
$153.50 (-0.51%) $0.79

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.