Report published September 23, 2026
Healthcare: Back in from the Cold – Pictet Trading & Sales Sector Report
Pictet Trading & Sales · September 23, 2026
Following an extreme period of underperformance, global healthcare is normalising as earnings revisions rebound to their highest levels since 2021. US healthcare is establishing a relative technical base while European healthcare trades at an attractive historical valuation discount.
Read the remaining 4 pages
Finvaulta summarizes Pictet Trading & Sales's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.Healthcare is emerging from historic underperformance, driven by resilient earnings revisions reaching their highest levels since 2021 and normalising relative valuations.
- 2.Valuation profiles diverge regionally: US healthcare trades rich versus its 10-year average at 18.4x NTM P/E, whereas European healthcare remains at an absolute discount at 15.3x NTM P/E.
- 3.Historically, US midterm election shifts in House control matter more than the Senate for healthcare performance, with Republican control delivering reliable short-term gains (100% positive at Day 125) and Democratic control yielding stronger Day-250 gains (25.5% average).
Table of Contents
- Relative trends: US Health Care basing, Europe still correcting
- Global healthcare: From capitulation to normalisation
- Healthcare's historic underperformance has largely unwound
- The recovery has coincided with improving earnings revisions
- US healthcare lagged despite improving earnings revisions
- Europe shows a similar fundamental disconnect
- Sentiment has weighed on European names too
- US healthcare's valuation discount has largely closed
- Europe: valuation still below its long-run norm
- Healthier global healthcare could support the SMI
- Do the midterms matter? House control has historically mattered more than Senate control for healthcare returns
- Democratic House: stronger late-cycle performance
- US Health Care (ST): 50-day SMA coincides with a potential wave-4 low
- STOXX Europe 600 Health Care (ST): Recovery from support faces major resistance
- Screening US healthcare
- Screening EU healthcare
Report data
MSCI World Health Care relative to MSCI World (top) and 1-year rolling return Z-score (bottom) — as of September 22, 2026.
| Metric | Estimate | Context |
|---|---|---|
| MSCI World Health Care 1-year rolling relative return Z-score | -2.7 standard deviations | Extreme relative underperformance level reaching one of the most extreme readings in series history |
| MSCI World Health Care 1-year rolling relative return Z-score | 0.0 standard deviations | Rebounded back to its long-term average, reversing earlier underperformance deficit |
| S&P 500 Health Care next-twelve-month P/E ratio | 18.4 x | Trades above its 10-year average of 16.6x |
| STOXX Europe 600 Health Care next-twelve-month P/E ratio | 15.3 x | Trades below its 10-year average of 17.3x |
| Healthcare sector weighting in Swiss Market Index (SMI) | 41.0% | Structural concentration linking Swiss market performance to global healthcare |
Reports in this series
Factory Daily letter is shown in chronological order through this edition, published on September 23, 2026.
Part of the Factory Daily letter series — view all 3 editions
Access the full report
And others from the leading tier 1 banks.
Free account: read previews and a daily allowance of full reports. Pro removes the daily limit.