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Technology stocks have highlighted this earnings season with many tech companies posting better-than-expected and somewhat reassuring results. With that being said there are several healthcare companies that are starting to stand out as well.
Here are two top-rated Zacks Medical sector stocks that investors may want to consider buying before their quarterly reports.
Sporting a Zacks Rank #2 (Buy) Cardinal Health stock looks attractive prior to its fiscal third-quarter results on Thursday, May 4. Cardinal Health’s Medical-Dental Supplies Industry is also in the top 22% of over 250 Zacks industries.
Cardinal Health looks poised to benefit from its strong business industry as a nationwide drug distributor and provider of services to pharmacies.
Cardinal Health’s third-quarter earnings are projected to be up 2% year over year at $1.48 per share with sales forecasted to rise 10% from the prior-year quarter to $49.66 billion. Plus, the Zacks Expected Surprise Prediction (ESP) indicates Cardinal Health may beat its Q3 earnings expectations with the Most Accurate Estimate having third quarter EPS at $1.56.
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Overall, Cardinal Health’s earnings are now anticipated to rise 8% in fiscal 2023 and jump another 16% in FY24 at $6.33 per share. Earnings estimate revisions have risen in the last week ahead of Cardinal Health’s quarterly report and are nicely up over the last quarter. Total sales are expected to be up 12% this year and rise another 6% in FY24 to $215.36 billion.
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The rising earnings estimates offer further support for Cardinal Health stock which trades at $82 a share and 15X forward earnings. This is attractively beneath the industry average of 22.2X and the S&P 500’s 19.1X.
With Cardinal Health stock up +40% over the last year and trading near 52-week highs the company’s attractive growth and valuation is reason to believe higher highs could be around the corner.
Another Zacks Medical stock that is worthy of consideration ahead of its first-quarter earnings report on Thursday is Ligand Pharmaceuticals. Sporting a Zacks Rank #2 (Buy) Ligand Pharmaceuticals’ Medical-Biomedical and Genetics Industry is in the top 33% of all Zacks industries.
Ligand is expected to be a beneficiary of its booming industry from its focus on pharmaceutical assets such as its Captisol formulation which is a validated chemically modified cyclodextrin designed to improve safety and solubility, stability, and bioavailability or lessen the volatility, irritation, smell or taste of drugs.
First-quarter earnings are projected to climb 77% at $1.03 per share compared to EPS of $0.58 in Q1 2022. This is despite sales being forecasted to decline -14% from the prior year quarter at $39.22 million. The Zacks ESP indicates Ligand should reach its first-quarter bottom-line expectations with the Most Accurate Estimate also having Q1 EPS at $1.03.
Image Source: Zacks Investment Research
Annual earnings are now forecasted to dip -13% in FY23 at $4.16 per share after a tough-to-compete-against year. Still, FY24 earnings are expected to stabilize and rebound by 10%. More intriguing, earnings estimate revisions have soared over the last quarter.
Fiscal 2023 EPS estimates are now up 26% over the last 90 days with FY24 EPS estimates soaring 48%. Total sales are expected to be down -35% this year but rebound and rise 27% in FY24 to $180.31 million.
Image Source: Zacks Investment Research
Trading at $74 a share and 18.4X forward earnings Ligand stock has seen an impressive rally over the last six months and is up +12% year to date.
Furthermore, Ligand stock still trades beneath the industry P/E average of 21.1X forward earnings and the benchmarks 19.1X. Ligand stock also trades well below its decade-long high of 210.1X and at a 59% discount to the median of 45.2X with the rising earnings estimates offering further support for more upside in shares of LGND.
Image Source: Zacks Investment Research
Takeaway
Cardinal Health and Ligand Pharmaceuticals are two healthcare companies that investors certainly want to watch going into their quarterly reports. Both company’s valuations are still attractive from a price-to-earnings standpoint and the rising earnings estimates are a good sign they may offer better-than-expected guidance which could give their stocks a further boost.
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2 Medical Stocks to Buy Before Earnings
Technology stocks have highlighted this earnings season with many tech companies posting better-than-expected and somewhat reassuring results. With that being said there are several healthcare companies that are starting to stand out as well.
Here are two top-rated Zacks Medical sector stocks that investors may want to consider buying before their quarterly reports.
Cardinal Health (CAH - Free Report) )
Sporting a Zacks Rank #2 (Buy) Cardinal Health stock looks attractive prior to its fiscal third-quarter results on Thursday, May 4. Cardinal Health’s Medical-Dental Supplies Industry is also in the top 22% of over 250 Zacks industries.
Cardinal Health looks poised to benefit from its strong business industry as a nationwide drug distributor and provider of services to pharmacies.
Cardinal Health’s third-quarter earnings are projected to be up 2% year over year at $1.48 per share with sales forecasted to rise 10% from the prior-year quarter to $49.66 billion. Plus, the Zacks Expected Surprise Prediction (ESP) indicates Cardinal Health may beat its Q3 earnings expectations with the Most Accurate Estimate having third quarter EPS at $1.56.
Image Source: Zacks Investment Research
Overall, Cardinal Health’s earnings are now anticipated to rise 8% in fiscal 2023 and jump another 16% in FY24 at $6.33 per share. Earnings estimate revisions have risen in the last week ahead of Cardinal Health’s quarterly report and are nicely up over the last quarter. Total sales are expected to be up 12% this year and rise another 6% in FY24 to $215.36 billion.
Image Source: Zacks Investment Research
The rising earnings estimates offer further support for Cardinal Health stock which trades at $82 a share and 15X forward earnings. This is attractively beneath the industry average of 22.2X and the S&P 500’s 19.1X.
With Cardinal Health stock up +40% over the last year and trading near 52-week highs the company’s attractive growth and valuation is reason to believe higher highs could be around the corner.
Image Source: Zacks Investment Research
Ligand Pharmaceuticals (LGND - Free Report) )
Another Zacks Medical stock that is worthy of consideration ahead of its first-quarter earnings report on Thursday is Ligand Pharmaceuticals. Sporting a Zacks Rank #2 (Buy) Ligand Pharmaceuticals’ Medical-Biomedical and Genetics Industry is in the top 33% of all Zacks industries.
Ligand is expected to be a beneficiary of its booming industry from its focus on pharmaceutical assets such as its Captisol formulation which is a validated chemically modified cyclodextrin designed to improve safety and solubility, stability, and bioavailability or lessen the volatility, irritation, smell or taste of drugs.
First-quarter earnings are projected to climb 77% at $1.03 per share compared to EPS of $0.58 in Q1 2022. This is despite sales being forecasted to decline -14% from the prior year quarter at $39.22 million. The Zacks ESP indicates Ligand should reach its first-quarter bottom-line expectations with the Most Accurate Estimate also having Q1 EPS at $1.03.
Image Source: Zacks Investment Research
Annual earnings are now forecasted to dip -13% in FY23 at $4.16 per share after a tough-to-compete-against year. Still, FY24 earnings are expected to stabilize and rebound by 10%. More intriguing, earnings estimate revisions have soared over the last quarter.
Fiscal 2023 EPS estimates are now up 26% over the last 90 days with FY24 EPS estimates soaring 48%. Total sales are expected to be down -35% this year but rebound and rise 27% in FY24 to $180.31 million.
Image Source: Zacks Investment Research
Trading at $74 a share and 18.4X forward earnings Ligand stock has seen an impressive rally over the last six months and is up +12% year to date.
Furthermore, Ligand stock still trades beneath the industry P/E average of 21.1X forward earnings and the benchmarks 19.1X. Ligand stock also trades well below its decade-long high of 210.1X and at a 59% discount to the median of 45.2X with the rising earnings estimates offering further support for more upside in shares of LGND.
Image Source: Zacks Investment Research
Takeaway
Cardinal Health and Ligand Pharmaceuticals are two healthcare companies that investors certainly want to watch going into their quarterly reports. Both company’s valuations are still attractive from a price-to-earnings standpoint and the rising earnings estimates are a good sign they may offer better-than-expected guidance which could give their stocks a further boost.