Going by the earnings picture so far, it’s quite apparent that the Medical sector has been more resilient to the COVID-19 induced economic volatility compared to the other sectors. In fact, the third-quarter 2020 results that have been reported so far have displayed signs of recovery when compared to the second quarter that bore the brunt of the pandemic entirely.
With the gradual lifting of stay-at-home orders and easing of restrictions, most of the Medical Products companies (integral to the broader Medical sector) are likley to have experienced business growth on the back of month-wise rebound in sales volumes. Apart from significant market adoption of COVID-19-related healthcare-support products and services, investment in advancing digital health and remote consultation technologies may have contributed to third-quarter performance.
However, some of the companies, particularly those with a huge international base witnessed a notable reduction in product demand across their core business segments and geographies in third quarter.
Nonetheless, going by the latest Earnings Preview, this sector’s scorecard so far reflects 5.4% earnings growth on 5.1% improvement in revenues. Overall, earnings are projected to increase 5.1% (Q2 reported growth was 4.7%) on 9.1% revenue growth (growth of 2.7% in Q2).
Let’s take a look at seven Medical Product stocks scheduled to announce results on Oct 29.
Stryker Corporation SYK: The first half of 2020 bore the brunt of the COVID-19 impact resulting in the deferral of elective and non-critical procedures. Although there has been a slow resumption of elective procedures, the resurgence in cases in several regions of the United States might lead to a pause in the same. Consequently, the impact of the pandemic is likely to have weighed on the company’s MedSurg and Orthopaedic segments in third-quarter 2020. Nonetheless, the company continues to witness strong demand for Mako on the back of its unique features and healthy order book despite financial constraints stemming from the COVID-19 pandemic. (Read more: Stryker to Report Q3 Earnings: What's in the Cards?)
Our proven model conclusively predicts an earnings beat for Stryker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat and that’s the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company has a Zacks Rank #3 and an Earnings ESP of +1.66%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stryker Corporation Price and EPS Surprise
Baxter International Inc. BAX: Increased demand for acute therapies products due to the COVID-19 pandemic, and continuous renal replacement therapies, devices and associated consumables are likely to have driven Baxter’s Acute Therapies business’ third-quarter 2020 performance. Moreover, the company’s strong product portfolio, and the planned launch of therapies and products might get reflected in the third-quarter revenues. (Read more: Baxter to Report Q3 Earnings: What’s in the Cards?)
Baxter has an Earnings ESP of +0.41% and a Zacks Rank #4 (Sell).
Baxter International Inc. Price and EPS Surprise
IDEXX Laboratories, Inc. IDXX: IDEXX is expected to have sustained its strong earnings trajectory in Companion Animal Group (“CAG”) Diagnostic revenues in third-quarter 2020 courtesy of high CAG diagnostic recurring revenues and continued high customer retention. Moreover, the company third-quarter performance might have benefited from its OPTI SARS-CoV-2 reverse transcription PCR (RT-PCR) test. (Read more: What's in Store for IDEXX Laboratories in Q3 Earnings?)
IDEXX has an Earnings ESP of +0.35% and a Zacks Rank #2.
IDEXX Laboratories, Inc. Price and EPS Surprise
ResMed Inc. RMD: High demand for critical care products — ventilators and ventilation mask systems — and provision of providing digital health solutions and other tools to customers have been aiding remote care amid the pandemic. This, in turn, is likely to have contributed to ResMed’s sales in first-quarter fiscal 2021.ResMed has an Earnings ESP of +14.22% and a Zacks Rank #3.
ResMed Inc. Price and EPS Surprise
Bio-Rad Laboratories, Inc. BIO: Bio-Rad’s manufacturing operations team has been responding to the pandemic strategically. Despite facing supply chain disruptions during the initial phase of the pandemic, the company has been ramping up production to meet increased demand of mainly its Polymerase Chain Reaction (PCR) instruments and reagents since the middle of second-quarter 2020. This uptrend is expected to get reflected in the company’s third-quarter 2020 results. (Read more: Bio-Rad to Report Q3 Earnings: What's in the Cards?)
Bio-Rad has an Earnings ESP of 0.00% and a Zacks Rank #3.
BioRad Laboratories, Inc. Price and EPS Surprise
Teleflex Incorporated TFX: Teleflex’s third-quarter 2020 revenues are likely to reflect balanced growth across majority of segments and geographies. Further, continued momentum in UroLift may have contributed to the third-quarter performance.
Teleflex has an Earnings ESP of -1.32% and a Zacks Rank #4.
Teleflex Incorporated Price and EPS Surprise
ABIOMED, Inc. ABMD: ABIOMED is likely to have witnessed a fall in U.S. Impella product revenues in second-quarter fiscal 2021 due to a drop in usage of Impella heart pumps owing to the COVID-19 pandemic. Nonetheless, the treatment success rates of ABIOMED’s SmartAssist, Impella Connect, IQ Impella Quality Assurance Database and Impella 5.0 are expected to get reflected in the upcoming quarterly results. (Read more: ABIOMED to Report Q2 Earnings: What's in the Offing?)
ABIOMED has an Earnings ESP of 0.00% and a Zacks Rank #3.
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Stryker Corporation (SYK): Free Stock Analysis Report
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