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MedTech Stocks' Q4 Earnings on Feb 16: LH, WST and MDRX

The fourth-quarter earnings season is gradually drawing to a close with 358 S&P 500 members having already reported their numbers (81.2% of the index's total market cap),. According to our latest Earnings Preview report, the scorecard so far has portrayed a much better picture with the quarter emerging as the highest with respect to earnings growth over the past two years.

Till Feb 10, total earnings for these members have gone up 6.1% on 4.6% higher revenues with 69% beating earnings estimates and 54.7% exceeding revenue expectations.

Per the report, Medical is one of the 13 broader sectors among the 16 Zacks sectors which have so far reported earnings growth. Among the 72.2% members of this sector, who have made their quarterly releases, earnings and revenue beat are standing at impressive levels of 79.5% and 56.4%, respectively. The sector has delivered 4.4% earnings growth on the back of 6% higher revenues in the fourth quarter.

What's in Store for the Med-Product Space?

MedTech, an important part within the broader Medical sector, holds a lot of promise at this moment. We note that the republican win has ensured a great victory for the entire industry as the likely revocation of the 2.3% medical device excise tax is going to be a big bonus for both the behemoths and small players.

According to the MedTech community, the cancellation of this tax along with other taxes will directly address issues like lack of opportunity for research and development, innovation, pipeline development, and make investments needed to accelerate patient and provider access to innovative health care products. This will also help in boosting job creation and quality of patient care, offering companies in the space an opportunity to strengthen their position to cope with the new situation.

Let's take a look at the major MedTech stocks slated to release their fourth-quarter 2016 numbers on Feb 16:

Laboratory Corp. of America HoldingsLH

Laboratory Corp. of America Holdings or LabCorp is a leading healthcare diagnostics company. It is currently focused on expanding its testing capabilities beyond the conventional health care setting. Also, it recently completed the acquisition of Sequenom, Inc. with the aim to expand its presence in both domestic and international levels. While the integration process is going on, we expect to see top-line contribution coming from Sequenom in the fourth quarter itself. However, foreign exchange woes and intense competition from major commercial laboratories and hospitals may affect results.

Our proven model does not conclusively show that LabCorp is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can see the complete list of today's Zacks #1 Rank stocks here .

LabCorp currently holds a Zacks Rank #3 and has an Earnings ESP of -0.47%. That is because the Most Accurate estimate stands at $2.12 while the Zacks Consensus Estimate is pegged at $2.13 (read more: LabCorp Q4 Earnings: What's in the Cards for the Stock? ).

Laboratory Corporation of America Holdings Price and EPS Surprise

Laboratory Corporation of America Holdings Price and EPS Surprise | Laboratory Corporation of America Holdings Quote

West Pharmaceutical Services, Inc.WST

The company manufactures packaging components and delivery systems for injectable drugs and healthcare products.

While a Zacks Rank #3 increases the predictive power of the ESP, a 0.00% ESP makes a surprise prediction uncertain. Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 55 cents. We note that, in the last reported quarter, the company registered an earnings beat of 1.92% and the trailing 12-month average surprise came in at positive 2.3%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

West Pharmaceutical Services, Inc. Price and EPS Surprise

West Pharmaceutical Services, Inc. Price and EPS Surprise | West Pharmaceutical Services, Inc. Quote

Allscripts Healthcare Solutions, Inc.MDRX

This information technology solutions and services provider to healthcare organizations may gain from regular contract wins and strategic collaborations in the fourth quarter. Further, the growing adoption of Allscripts' products and services like the Sunrise platform, FollowMyHealth, Touchworks EHR, EPSi and dbMotion will drive market traction.

The stock's Zacks Rank #3 along with a 0.00% ESP makes the surprise prediction uncertain. Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 12 cents (read more: Can Allscripts Surprise Investors in Q4 Earnings? ).

Allscripts Healthcare Solutions, Inc. Price and EPS Surprise

Allscripts Healthcare Solutions, Inc. Price and EPS Surprise | Allscripts Healthcare Solutions, Inc. Quote

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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