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Medical Product Stocks Q4 Earnings Roster: SYK, ISRG, RMD

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The fourth-quarter earnings season is in its nascent stage with 41 S&P 500 participants having reported results so far. According to our latest Earnings Trends report, the earnings cycle has seen an encouraging start, courtesy of stable bank results. The uptrend was the result of reduced regulatory burden, tax law changes and an improved outlook for the domestic economy.

Per the latest Earnings Trends report, the fourth-quarter earnings for the S&P 500 companies are expected to be up 4.7% from the year-ago quarter on 3.7% higher revenues. With the majority of earnings yet to be released, the next week will be crucial in deciding whether this quarter will genuinely turn out to be a game changer. Irrespective of the outcome, there will definitely be good news for investors focusing on the Medical sector.

Per the report, Medical is one of the broader sectors among the 16 Zacks sectors that is expected to report earnings growth in the fourth quarter. The sector is expected to witness 2.9% earnings growth on the back of 5.6% higher revenues in the quarter. Investors are also bullish about the space as seen from the fact that the Zacks categorized Medical - Products industry has registered growth of 3.74% in the last one month, comfortably outperforming the S&P 500 Index that gained around 0.05% only.

What’s in Store for the Med-Product Industry?

Medical product, an important part of the medical device subcategory within the broader Medical sector, looks promising at the moment. According to a survey by KPMG, the companies under this category that expect to spend more than 6% of revenues on R&D/innovation is rising, and fast exceeding the number of companies spending on R&Ds in other manufacturing industries. There can be various innovations and breakthroughs – new products or surgical techniques, as well as cost-effective products targeting emerging markets.

Let’s take a sneak peek into the expected performance of three major medical product companies that are expected to report earnings early next week.

Stryker Corporation (SYK - Free Report) is set to report fourth-quarter figures on Jan 24, after market closes. The company’s expanding product portfolio is a key catalyst in our view. We believe that the growing adoption of MAKO robots will drive sales in the orthopedic and reconstructive surgery market. Additionally, Stryker is well poised with the acquisitions of both Sage and Physio-Control in the recent past.

Our proven model shows that Stryker is likely to beat earnings estimates because it has the right combination of a Zacks Rank #3 (Hold) and Earnings ESP of +0.57%. Our model shows that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 for an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here. Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions. (Read more: Stryker: Can It Post a Beat this Earnings Season?)

Stryker Corp. Price and EPS Surprise

 

Stryker Corp. Price and EPS Surprise | Stryker Corp. Quote

Intuitive Surgical Inc. (ISRG - Free Report) is set to report fourth-quarter results on Jan 24, after the closing bell. We believe that growing adoption of Intuitive Surgical’s da Vinci system among physicians for general surgery, oncology, urology and gynecology procedures is a key growth catalyst for the company.

Our proven model does conclusively show that Intuitive Surgical is likely to beat on earnings this quarter. This is because Intuitive Surgical currently has an Earnings ESP of +1.71% and a Zacks Rank #3. This is because the Most Accurate estimate stands at $5.35 and the Zacks Consensus Estimate is pegged at $5.26. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. (Read more: Is Earnings Beat Likely for Intuitive Surgical in Q4?).

Intuitive Surgical Inc. Price and EPS Surprise

 

Intuitive Surgical Inc. Price and EPS Surprise | Intuitive Surgical Inc. Quote

ResMed Inc. (RMD - Free Report) is slated to report its quarterly numbers on Jan 23, after the market closes.

Our proven model does not conclusively show that ResMed is likely to beat earnings this quarter. This is because ResMed has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). We note that this leading provider of generators, masks, and related accessories faces steep competition in the sleep-disordered breathing (SDB) products market.
(Read more: ResMed Q2 Earnings: Disappointment in the Cards?)

ResMed Inc. Price and EPS Surprise

 

ResMed Inc. Price and EPS Surprise | ResMed Inc. Quote

Don’t miss on our full earnings release articles for these three stocks, as the actual results might hold some surprises!

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