What Happened?

A number of stocks jumped in the afternoon session after reports revealed a potential drug-pricing agreement between the White House and the pharmaceutical industry. 

The Trump administration is advancing its “Most Favored Nation” initiative, which aims to lower prescription drug costs for Americans. This policy would tie the prices of medications in the U.S. to the lowest costs paid by other wealthy nations. As part of this push, Pfizer has reportedly entered into an agreement to voluntarily sell its medications through Medicaid at these reduced prices. The move comes as the administration intensifies pressure on drugmakers to make prices more affordable. While pricing controls can often be a headwind, the market's positive reaction suggests that investors may see this voluntary agreement as a way to resolve regulatory uncertainty, providing a clearer path forward for the industry.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Therapeutics company AbbVie (NYSE: ABBV) jumped 3.9%. Is now the time to buy AbbVie? Access our full analysis report here, it’s free.
• Specialized Medical & Nursing Services company AMN Healthcare Services (NYSE: AMN) jumped 4%. Is now the time to buy AMN Healthcare Services? Access our full analysis report here, it’s free.
• Surgical Equipment & Consumables - Specialty company LeMaitre (NASDAQ: LMAT) jumped 2.8%. Is now the time to buy LeMaitre? Access our full analysis report here, it’s free.
• Research Tools & Consumables company Waters Corporation (NYSE: WAT) jumped 3.4%. Is now the time to buy Waters Corporation? Access our full analysis report here, it’s free.
• Branded Pharmaceuticals company Organon (NYSE: OGN) jumped 3.1%. Is now the time to buy Organon? Access our full analysis report here, it’s free.

Zooming In On AMN Healthcare Services (AMN)

AMN Healthcare Services’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 20 days ago when the stock dropped 6.2% on the news that Bank of America Securities lowered its price target on the stock from $20 to $18. 

Analyst Kevin Fischbeck maintained the firm's "Underperform" rating, with the price target adjustment reflecting current market conditions and projections in the healthcare staffing industry. This move is part of a broader trend of cautious analyst sentiment surrounding the company. In recent months, other firms including JMP Securities, BMO Capital, and UBS have also reduced their price targets for AMN. The series of downward revisions highlights the cautious stance analysts are taking towards the stock amid evolving industry dynamics.

AMN Healthcare Services is down 21.1% since the beginning of the year, and at $19.36 per share, it is trading 54.4% below its 52-week high of $42.42 from October 2024. Investors who bought $1,000 worth of AMN Healthcare Services’s shares 5 years ago would now be looking at an investment worth $331.17.

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