Portfolio Manager Insights

Health care stocks may be ripe for recovery

The health care sector appears to be emerging from a prolonged, post-COVID slump, with a particularly constructive prognosis for the life sciences tools and services industry, according to Fidelity’s Preeti Sayana.

By: Preeti Sayana
Updated: 5/18/2026
  • The health care sector has recently shown signs of life and potential stability after shaking off a long list of challenges, according to Fidelity Portfolio Manager Preeti Sayana, who believes part of the cure is increased spending among biopharmaceutical firms and a revived diagnostics industry driven by technological advancement, evolving markets needs and strategic realignment.
  • “The backdrop is far more constructive than it has been in some time,” says Sayana, who manages Fidelity Advisor® Sustainable U.S. Equity Fund. “I am particularly excited about makers of diagnostic or medical products that stand to benefit from normalization in capital spending and easing inventory and supply-chain challenges.”
  • In actively managing the diversified domestic equity strategy, launched in 2021, Sayana applies a sustainability lens to choose stocks of companies she considers stewards of environmental, social, and financial and operational capital. She believes businesses with robust sustainability practices should be more resilient over time.
  • Accordingly, she cites Thermo Fisher Scientific and Danaher as illustrative holdings she believes are well-positioned within the life sciences tools and services industry, a conviction she also extends to medical device maker Boston Scientific; all three were notable positions as of March 31, 2026.
  • “The business headwinds that previously weighed on these firms – such as inventory corrections, supply chain disruptions and weaker overseas demand – appear to have eased,” says Sayana. “This could support improved financial performance going forward, in my view.”
  • She adds that each is supported by a clean balance sheet, normalized customer inventory and improved order patterns.
  • As for Boston Scientific, Sayana sees potential for upside over the intermediate term. “Its stock valuation seems appropriate as of March 31, and I believe the company should be able to continue executing well,” she says.
  • As the health care sector moves beyond years of uncertainty, Sayana remains confident in her renewed outlook. “These companies, and several others, are aligned with improving business trends,” she says. “I believe they could see positive momentum if health care continues its recovery.”
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Health care stocks may be ripe for recovery
The health care sector appears to be emerging from a prolonged, post-COVID slump, with a particularly constructive prognosis for the life sciences tools and services industry, according to Fidelity’s Preeti Sayana.
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