The earnings season is coming to an end for
Medical Products companies within the broader Medical sector.
Fourth-quarter results of the majority of medical product stocks have shown a sequential decline as the last two months of Q4 witnessed the emergence of new strains of coronavirus that are claimed to be 56% more contagious. During this period, the medical product companies witnessed a year-over-year reduction in product demand across core business segments (due to postponement of elective and non-COVID 19 healthcare activities through the months of November and December on resurgence of COVID-19).
Boston Scientific ( BSX Quick Quote BSX - Free Report) , LabCorp ( LH Quick Quote LH - Free Report) , and Zimmer Biomet are a few stocks for whom base-business performance registered slower recovery rate compared to the third quarter as these companies faced the impact of lesser patient visits from middle of November till December end.
At the same time, however, this sector’s several new COVID-19-related healthcare support products performed well, thus contributing to Q4 performance. Though it was initially assumed that once vaccines are rolled out, the demand for COVID-support products will decline, the resurgence in cases through the fourth quarter put the focus back on this space.
Hologic ( HOLX Quick Quote HOLX - Free Report) , ResMed and Thermo Fisher sailed through the fourth-quarter fiasco banking on their COVID-19 specific healthcare supports.
Per the latest
Earnings Preview, 85.5% of the companies in the Medical sector, constituting nearly 93.5% of the sector’s market capitalization, have already reported earnings. While 78.7% beat earnings estimates, 85.1% beat the same for sales. Earnings increased 16.8% year over year on 13.3% higher revenues. Overall, fourth-quarter earnings for the Medical sector are expected to rise 14.6% on 12.9% sales increase. Zacks Methodology
Given the high degree of diversity in the Medical Products industry, finding the right stocks with the potential to beat estimates might be quite a daunting task.
However, our proprietary Zacks methodology makes this fairly simple.
We are focusing on some stocks that have the combination of a positive
Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here .
Our research shows that for stocks with this combination, chances of an earnings surprise are as high as 70%.
Earnings ESP provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter.
Here we present four stocks that are expected to beat earnings estimates in this reporting cycle.
Medtronic plc ( MDT Quick Quote MDT - Free Report) : Through the pandemic quarters, Medtronic experienced reduction in the level of quarter-end customer bulk purchases. However, in a December announcement, it noted that these led to a more even sales spread throughout the quarter. This should get reflected in its third-quarter fiscal 2021 results.
Lower Bulk Purchases May Weigh on Medtronic Q3 Earnings)
The combination of Medtronic’s Earnings ESP of +0.13% and a Zacks Rank #3 raises the possibility of an earnings surprise in the to-be-reported quarter.
The company is scheduled to release results for the third quarter of fiscal 2021 on Feb 23, before market open.
Masimo Corporation ( MASI Quick Quote MASI - Free Report) : Masimo is expected to have gained in the fourth quarter from its key Product segment, which is witnessing solid growth in the pandemic months on a surge in non-invasive technology shipments. The recent launch of the Masimo SafetyNet, designed to help in the fight against the coronavirus pandemic should have contributed to the quarter’s top line.
The company is scheduled to release fourth-quarter 2020 results on Feb 23.
Masimo has an Earnings ESP of +3.15% and a Zacks Rank #3.
DENTSPLY SIRONA Inc. ( XRAY Quick Quote XRAY - Free Report) : The company might report better-than-expected fourth quarter results, following the ongoing improvement in sales trends with dental offices reopening and rise in patient visits..
The company is scheduled to release fourth-quarter 2020 results on Mar 1.
DENTSPLY SIRONA has an Earnings ESP of +139.29% and a Zacks Rank #2.
The Cooper Companies, Inc. ( COO Quick Quote COO - Free Report) : The company might report rebound in sales of CooperVision in the first quarter of fiscal 2021. MyDay and Bioinfinity too might have registered strong rebound.
The company is scheduled to release fourth-quarter 2020 results on Mar 4.
Cooper has an Earnings ESP of +1.68% and a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
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