Coronavirus cases are on the rise and people have again started panicking. Given that the economy has also started reopening, going outdoors has become all the more risky. With no signs of a vaccine anytime soon, maintaining social distancing is the only option left to avoid getting contaminated.
This makes the role of personal protective equipment (PPE) all the more important. In fact, PPE manufacturing has become one of the most important industries in the United States nearly overnight. And now with relaxations in at-home orders and economic reopening, the use of PPE has become all the more important. This brings to focus some companies that have changed gears and are concentrating now on developing and marketing PPE.
PPE Market Poised to Grow
The U.S. economy is opening but the Fed and the Centers for Disease Control and Prevention (CDC) has issued stringent guidelines that require both public and caregivers to use PPE to minimize chances of COVID-19 infection. Moreover, with a surge in fresh coronavirus cases in several states, fears of a second wave have started gripping millions. This has made the use of PPE all the more crucial.
According to Reports and Data, the global healthcare personal protective equipment market was valued at $5,018.3 million in 2019 and is expected to reach $8,024.4 million by 2027 at a CAGR of 4.5%. Gloves, face protection masks or face shield, goggles and mask, gloves, gown or coverall, head cover, and boots are among some of the PPE with soaring global demand.
PPE Market to Grow on Fears of a Second Wave
The United States has reported more than 70,000 new coronavirus cases for the second day in a row now. Nonetheless, it is unlikely that the economy will shut down again.
This makes PPE an indispensable companion outdoors. The key factors to drive the market for personal protective equipment include increasing awareness on the importance of healthcare safety, increasing focus on safety preparedness at healthcare facilities, and an accelerating rate of infections apart from a stringent regulatory framework.
Given this scenario, the industry's largest manufacturers are operating at maximum capacity and aiming to expand their domestic production capacity within the year.
Stock to Watch
We have zeroed in on four companies that have been leading from the front in ramping up production and distribution of PPE since the coronavirus outbreak.
Lakeland Industries, Inc. LAKE manufactures and sells industrial protective clothing and accessories for the industrial and public protective clothing market worldwide. It offers limited use/disposable protective clothing, such as coveralls, laboratory coats, shirts, pants, hoods, aprons, sleeves, arm guards, caps and smocks.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 198.7% over the past 30 days. Its shares have gained 41.8% in the past three months. Lakeland sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Honeywell International Inc. HON has been working aggressively over the past three months to meet growing demand for personal protective equipment. The company last month announced that it is adding manufacturing capabilities in Phoenix to produce N-95 face masks in support of the U.S. government’s response to the novel coronavirus. It now aims to produce more than 20 million N-95 disposable masks monthly. Also, as the economy reopens, Honeywell, in an effort to provide a safer, healthier travel experience, has introduced safety packs designed to better protect airline passengers and crew while flying.
Honeywell International’s expected earnings growth rate for the next year is 11.1%. Its shares have gained 11.1% in the past three months. Honeywell has a Zacks Rank #3 (Hold).
3M Company MMM has been in focus since the coronavirus outbreak. Although the company was somewhat slow in its initial response to the growing demand for respirators in the United States, it ramped up manufacturing of N-95 masks. The company is constantly striving to meet domestic demand for N-95 masks since President Donald Trump urged it to increase production capacity.
In May, the company said that it would triple its monthly production of N-95 masks after winning a pair of contracts from the U.S. Department of Defense worth more than $200 million. Globally, 3M expects to double its annual output of N95 masks to 2 billion. The company’s expected earnings growth rate for next year is 9.6%. Its shares have gained 7.3% in the past three months. 3M carries a Zacks Rank #3.
MSA Safety Inc. MSA is engaged in the development, manufacture and supply of safety products that protect people and facility infrastructures. The company's core product lines include self-contained breathing apparatus, fixed gas and flame detection systems, handheld gas detection instruments, industrial and fire service head protection products and fall protection devices. Earlier this month, the company partnered with Allegheny Health Network (AHN) to procure P100 industrial grade respirators that can be disinfected and reused repeatedly.
The company’s expected earnings growth rate for the next year is 10.7%. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the past 30 days. Its shares have gained 5.6% in the past three months. MSA has a Zacks Rank #3.
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