For Immediate Release
Chicago, IL –September 27, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Varian Medical Systems, Inc. (VAR - Free Report) , Stryker Corp. (SYK - Free Report) and Medtronic plc (MDT - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
3 MedTech Stocks in Focus on Emerging Market Prospects
Chronic diseases and conditions have been on the rise globally. According to a report by World Health Organization, prevalence of chronic diseases is projected to rise by 57% by 2020. With developing nations experiencing significant growth in aging population, emerging geographies are expected to be worst hit.
Per a report by Med Device Online, emerging countries carry around 90% of the world’s infectious disease burden. Further, emerging market countries are estimated to increase healthcare spending as a percentage of GDP by 24.4% compared with 9.8% in developed markets by 2040, according to a report by KraneShares.
With emerging market countries presenting such lucrative prospects for the MedTech players, investors can take a look at the space.
Emerging Economies Present Lucrative Prospects
According to a report by BCG, emerging markets account for less than one-quarter of the MedTech industry’s global revenues but is estimated to reach nearly one-third by 2022. MedTech market in China – the second largest in the world – is anticipated to grow by 13% annually from 2015 through 2022. Meanwhile, India’s MedTech market, which is currently the fifth largest globally, could pose a serious threat to Japan and Germany in terms of size by about 2022.
In China, the government had launched the “Healthy China 2030 Plan” in 2016, as a response to growing healthcare concerns. Per a report by The Economist, the country’s MedTech have already established their presence in some of the most rapidly growing MedTech market segments – imaging, in-vitro diagnostics (IVD) and high medical consumables.
Shifting our focus to India, per a report by The Economic Times, the domestic MedTech industry accounted for $5.7 billion in 2017 and is anticipated reach to $7.8 billion and $9.6 billion in 2020 and 2022, respectively. Moreover, India has one of the lowest per capita spend of $4 on medical devices, significantly lower than the global average of $66.3, which suggests substantial untapped potential.
Latin America also holds enormous prospects, as evident from a report by Medgadget, which suggests that medical devices market in Brazil is expected reach $1.84 billion at a CAGR of 9% over a period of 2017-2023.
As stated by Moody’s, in 2019, the medical device makers are likely to exhibit mid-single digit revenue growth fueled by product innovation across most of the companies and categories. Additionally, sales in emerging markets are expected to display a double-digit percentage rise.
Here are three MedTech stocks that have been exhibiting huge potential in the emerging markets:
Varian Medical Systems, Inc.has been leveraging its capability to treat cancer in emerging economies that are slightly under-equipped to address the prevalence of the same. According to a MedTech Dive report, in May 2019, Varian Medical strengthened presence in India by acquiring Cancer Treatment Services International for $283 million.
This Zacks Rank #2 (Buy) company has a long-term earnings growth rate of 8%. For 2019, the Zacks Consensus Estimate for revenues is pegged at $3.20 billion, indicating an improvement of 9.6% from the year-ago period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past year, Varian Medical’s shares have gained 4.5%, against the industry’s decline of 8.8%.
One of the core growth strategies of Stryker Corp. has been international expansion. It is important to note here that most of Stryker’s emerging market sales come from China. The company is in the process of launching its Mako platform in China, with the hip approval already in place. The company is awaiting total knee approval in this country.
This Zacks Rank #3 (Hold) company has a long-term earnings growth rate of 10%. For 2019, the Zacks Consensus Estimate for revenues is pegged at $14.87 billion, indicating an improvement of 9.3% from the year-ago period.
Over the past year, Stryker’s shares have gained 24.5%, against the industry’s decline of 3%.
Medtronic plc has been strengthening focus on emerging economies. In March 2019, the company launched the MedTech Innovation Accelerator at Pujiang International Science and Technology City in Minhang District, Shanghai.
This Zacks Rank #2 company has a long-term earnings growth rate of 7.3%. For fiscal 2020, the Zacks Consensus Estimate for revenues is pegged at $31.5 billion, indicating an improvement of 3.1% from the year-ago period.
Over the past year, Medtronic’s shares have gained 10.2%, against the industry’s decline of 3%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.