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4 Medical Products Stocks Set to Beat This Earnings Season

So far the first-quarter reporting cycle has displayed an encouraging picture for the Medical Products companies within the broader Medical sector. Collective business growth has improved from the last reported quarter with month-wise strong rebound in base sales volumes. These can be attributed to gradual lifting of restrictions and people getting back to pre-pandemic normalcy. Besides, testing, vaccine and therapeutic makers have been riding on huge market adoption of their COVID-19-related healthcare-support products and services.

More specifically, the first-quarter results of the majority of medical product stocks have shown accelerated base business growth, after being in the doldrums through the earlier pandemic-affected quarters.

Although vaccine and therapeutic makers are still riding on huge market adoption of their COVID-19-related healthcare-support products and services, there has been significant reduction in demand for COVID-19 testing due to a drop in new cases.

Q1 Scorecard Trend

Boston Scientific BSX, LabCorp LH, Quest Diagnostics and Hologic HOLX are a few companies whose  base-business performance registered strong recovery rate. For Boston Scientific, first-quarter organic sales grew significantly compared to the 2019 comparable period (pre pandemic). Growth came in the second half of the quarter on stronger-than-anticipated procedure recovery and market share gains across most of its businesses and regions.

For LabCorp, its Diagnostics and Drug Development base business revenues increased 8% and 24% respectively. Despite its expectation of significant sinking of COVID-related testing revenues through the months of 2021, the company’s raised 2021 guidance banking on fast recovering base business buoys optimism..

For Quest Diagnostics too, compared to first-quarter 2019 baseline, total base testing volumes increased 1.5% and benefited from M&A and new PLS partnerships that began in 2020. In March 2021, for the first time since the pandemic began, monthly organic revenues in the base business grew compared to the 2019 comparable figure for the company. At the same time, the company noticed slower demand for COVID-19 testing in the first quarter, reflecting an industry-wide trend. Quest Diagnostics performed an average of 101,000 COVID-19 molecular tests per day in the first quarter, well below the company’s current capacity of approximately 300,000 tests per day.

Hologic too reported strong organic growth on strength in the company’s Breast Health and GYN Surgical arms. On the other hand, sales of COVID-19 tests in the United States, although high, have been gradually falling following the rollout of vaccines.

Per the latest Earnings Preview, 31.5% of the companies in the Medical sector, constituting nearly 49.3% of the sector’s market capitalization, have already reported earnings. A total of 64.7% beat both earnings and revenue estimates. Earnings increased 21% year over year on 10.3% higher revenues. Overall, first-quarter earnings for the Medical sector are expected to rise 21.4% on 10.5% 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 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.

Owens & Minor OMI: With the unrelenting spread of COVID-19 across the globe through the first-quarter months, the demand for its personal protective equipment (“PPE”) line was sky high. The latest developments accordingly are likely to have significantly boosted the company’s top line in the first quarter.

(Read more: Owens & Minor to Report Q1 Earnings: What's in Store?)

The combination of Owens & Minor’s Earnings ESP of +2.41% and a Zacks Rank #2 raises the possibility of an earnings surprise in the to-be-reported quarter.

The company is scheduled to release results for the first quarter of 2021 on May 5, before market open.

Owens & Minor, Inc. Price and EPS Surprise

Owens & Minor, Inc. price-eps-surprise | Owens & Minor, Inc. Quote

Inogen, Inc INGN: Despite a soft pandemic-led business scenario, Inogen’s direct-to-customer business model lent it a leading position in the oxygen therapy market. In fact, direct-to-consumer is expected to be its fastest growing channel in 2021. This should get reflected in the company’s first-quarter results.

The company is scheduled to release first-quarter 2021 results on May 5.

Inogen has an Earnings ESP of +47.18% and a Zacks Rank #2.

Inogen, Inc Price and EPS Surprise

Inogen, Inc price-eps-surprise | Inogen, Inc Quote

DENTSPLY SIRONA Inc. XRAY: The company might report better-than-expected first quarter results, given the ongoing improvement in sales trends on reopening of dental offices and rise in patient visits..

The company is scheduled to release first-quarter 2021 results on May 6.

DENTSPLY SIRONA has an Earnings ESP of +11.36% and a Zacks Rank #2.

DENTSPLY SIRONA Inc. Price and EPS Surprise

DENTSPLY SIRONA Inc. price-eps-surprise | DENTSPLY SIRONA Inc. Quote

Centogene N.V. CNTG: The company’sdiagnostic segment is expected to have shown strong signs of recovery. Within pharma, the company’s 16 new collaborations and another 16 extensions of existing collaborations are expected to have added to the company’s top line in the to-be-reported quarter.

The company is scheduled to release first-quarter 2021 results on Jun 21.

Centogene has an Earnings ESP of +49.15% and a Zacks Rank #2.

Centogene N.V. Price and EPS Surprise

Centogene N.V. price-eps-surprise | Centogene N.V. Quote

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DENTSPLY SIRONA Inc. (XRAY): Free Stock Analysis Report
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Hologic, Inc. (HOLX): Free Stock Analysis Report
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Laboratory Corporation of America Holdings (LH): Free Stock Analysis Report
Inogen, Inc (INGN): Free Stock Analysis Report
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