Split US Congress after 2026 midterms could boost healthcare stocks, Mizuho says
XLV•Mizuho said a divided Congress after the November 2026 midterms could reduce policy uncertainty and support healthcare stocks. It named UnitedHealth Group as its top pick and said managed-care stocks averaged 13.3 times forward earnings after nine elections that produced divided government, versus 12.5 times beforehand.
1. Potential policy catalyst
A divided US Congress after the November 2026 midterms could be a “positive catalyst” for healthcare stocks by reducing policy uncertainty, Mizuho Securities analysts said in a research note. Mizuho expects Democrats to take the House while Republicans retain the Senate in a 50-50 split.
2. Healthcare outlook
Mizuho said healthcare companies have historically performed better under divided government, which it expects to reduce the likelihood of significant legislative changes after two years of considerable legislative and regulatory changes. Across nine elections since 1992 that resulted in divided government, managed-care stocks traded at an average 13.3 times forward earnings, up from 12.5 times heading into the election.
3. Stocks in focus
Mizuho named diversified health insurers as best positioned and UnitedHealth Group as its top pick. It expects hospital operators HCA Healthcare and Universal Health Services to see steady valuations. Clinical lab companies Quest Diagnostics and Labcorp could get a near-term boost if Congress delays planned Medicare payment cuts before year-end. A Democratic win in both chambers could revive fears of sweeping reform, including renewed Medicare for All rhetoric.
