The renewed military confrontation between the United States and Iran has once again reminded investors how quickly geopolitical risks can reshape financial markets. Fresh U.S. strikes on Iran, coupled with repeated threats to shipping in the Strait of Hormuz, have revived fears of supply-chain disruptions, higher energy prices and persistent inflation. While intermittent ceasefire discussions have offered brief relief, repeated violations and renewed attacks have raised doubts about the durability of any peace agreement. Oil prices have already gained sharply following the latest escalation, underscoring the vulnerability of energy-dependent industries and economically sensitive sectors.
Against this uncertain backdrop, investors should increasingly look for sectors capable of delivering steady earnings regardless of macroeconomic turbulence. Healthcare stands out because demand for medical services remains largely non-discretionary, even during economic slowdowns or geopolitical crises. Companies with diversified revenue streams, disciplined capital allocation and resilient operating models are better positioned to weather inflationary pressures and market volatility than many cyclical businesses.
Within this defensive landscape, Elevance Health ELV, Tenet Healthcare THC andAveanna Healthcare Holdings AVAH appear particularly well positioned, thanks to durable cash flows, efficient operational execution and strong business models that remain largely insulated from international geopolitical disruptions. Each of these companies currently carries a Zacks Rank #2 (Buy) and has a Value and Growth score of A, reflecting a cheap valuation with strong upside potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Medical Industry as Better Bet Amid Volatile War Scenario
Periods of geopolitical uncertainty typically reward sectors that generate stable earnings independent of economic cycles, making healthcare one of the market's traditional defensive havens. Medical spending tends to remain resilient even when consumers cut discretionary purchases, allowing healthcare companies to preserve revenue visibility during volatile periods.
Businesses with strong balance sheets, consistent margins, diversified revenue sources and disciplined capital allocation are generally better equipped to absorb higher input costs or temporary economic disruptions. Healthcare valuations remain attractive across several subsectors, providing investors with an opportunity to buy quality companies at reasonable valuation multiples while benefiting from steady earnings growth. Rather than simply offering downside protection, fundamentally strong healthcare companies can deliver meaningful long-term capital appreciation as markets eventually stabilize.
3 Medical Stocks With Attractive Valuation
Elevance Health, Tenet Healthcare and Aveanna Healthcare have generated wealth for their investors so far in 2026, outperforming the Zacks Medical sector. The share price performances of ELV and AVAH have also outperformed the S&P 500 Index. This better-than-sector return by each of these companies reflects their strong fundamentals. Moreover, these companies are trading at attractive valuations despite the rally in their share price.
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Elevance Health
Elevance Health offers investors a balanced combination of health insurance, pharmacy services and Carelon's integrated care platform, reducing dependence on any single business line. The company raised its 2026 earnings guidance after first-quarter results exceeded expectations and continues embedding artificial intelligence across clinical and administrative operations to improve efficiency and lower healthcare costs.
Management also reiterated confidence in achieving at least 12% adjusted EPS growth in 2027 while maintaining disciplined pricing and capital deployment. Its predominantly U.S.-focused operations and diversified membership base provide stability despite fluctuations in individual government programs.
Elevance Health’s sales and earnings estimates for 2026 suggest a decline of 1.7% and 11.3%, respectively, year over year. Its earnings estimate for 2026 has improved 0.3% over the past 60 days. ELV’s earnings are likely to witness a CAGR of 6.6% over the next five year compared to the industry’s 15.4%.
Following a 18.7% rally so far this year, ELV is trading at a P/S F12M valuation of 0.46X, below the industry average of 0.52X. The current valuation is also lower than the five-year median of 0.64X. The stock seems to be at cheap valuation despite a strong rally, indicating strong growth prospects.
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Tenet Healthcare
Tenet Healthcare combines strong financial discipline with a diversified healthcare delivery platform spanning hospitals and the high-growth ambulatory surgery business through USPI. Management reaffirmed its 2026 outlook after first-quarter results exceeded expectations, highlighting disciplined expense management, AI-driven productivity initiatives and robust free cash flow generation.
The company continues investing in ambulatory expansion while aggressively repurchasing shares, reflecting confidence in its balance sheet. Its earnings are increasingly supported by outpatient care, especially joint replacements. Nearly half of EBITDA is generated by ambulatory operations that remain less exposed to reimbursement volatility.
Tenet Healthcare’s sales and earnings estimates for 2026 suggest growth of 3.3% and 5%, respectively, compared to the year-ago period. Its earnings estimate for 2026 has improved 0.7% over the past 60 days. THC’s earnings are likely to witness a CAGR of 6.9% over the next five year compared to the industry’s 5.6%.
Following a 3.8% year-to-date gain, THC is trading at a Price-to-Sales Forward 12 Month (P/S F12M) valuation of 0.8X, above the industry average of 0.63X. The current valuation is higher than the five-year median of 0.45X. The slightly higher valuation for THC reflects investors’ enthusiasm for the stock’s prospects, backed by its strong growth potential.
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Aveanna Healthcare
Aveanna Healthcare represents a differentiated home healthcare growth story built on expanding demand for lower-cost community-based care. First-quarter revenues climbed nearly 16% while adjusted EBITDA increased more than 25%, prompting management to raise full-year guidance.
The company continues to strengthen preferred payer relationships, improving reimbursement rates and expanding through acquisitions while reducing leverage and enhancing free cash flow. Its business spans private-duty nursing, home health, hospice and medical solutions, creating diversified revenue streams rather than relying on a single service category. Additionally, because it operates almost entirely within the United States, the company has limited exposure to international geopolitical risks and foreign-market disruptions.
Aveanna Healthcare’s sales and earnings estimates for 2026 suggest growth of 8.8% and 21.7%, respectively, compared to the year-ago period. Its earnings estimate for 2026 has improved 14.1% over the past 60 days. AVAH’s earnings are likely to witness a CAGR of 14.9% over the next five year compared to the industry’s 12.4%.
Despite a 17.3% gain so far this year, AVAH is trading at a P/S F12M valuation of 0.78X, below the industry average of 3X. The current valuation is higher than the five-year median of 0.39X. A cheaper valuation than the industry, coupled with strong sales and earnings growth estimates, makes this company an attractive bet for investors.
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Tenet Healthcare Corporation (THC): Free Stock Analysis Report
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Elevance Health, Inc. (ELV): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).