Demand for medical devices and equipment is rebounding following a pandemic-led decline last year as people deferred elective surgeries. This, coupled with their integration of advanced technologies and successful entry in new market segments, we think positions Intuitive (ISRG), Stryker (NYSE:SYK), and Edwards (EW) well to deliver solid returns in the coming months. Read on.Because medical procedures and surgeries were divided into essential and non-essential during the pandemic, with priority accorded to COVID-19 cases, companies that market other medical devices suffered as non-essential surgeries and therapies were postponed or canceled.
However, with the significant decline in COVID-19 cases, non-essential surgeries are being rescheduled this year. After fully vaccinating 48.2% of the U.S. population, the focus is now being shifted to treating other critical diseases also. This, combined with big tech giants’ interest in the healthcare sector, is expected to drive the leading players in the medical devices industry to innovate user-friendly, sustainable and efficient medical devices. Indeed, the global medical device market is expected to grow at 5% CAGR to $623 Billion by 2026.
Resurgent investor interest in the industry is evident in the iShares U.S. Medical Devices ETF’s (IHI) 5% returns compared to the SPDR S&P 500 Trust ETF’s (SPY) 2.6% gains over the past month.