Healthcare Stock Q4 Earnings Slated for Feb 14: ESRX, CRL, Q

Overall fourth-quarter results have been quite impressive with 358 members in the S&P 500 cohort having reported their results. Per the latest Earnings Preview, the fourth-quarter earnings for the S&P 500 companies are expected to be up 7.5% from the year-ago quarter on 3.9% growth in revenues.

Medical, being one of the broader sectors among the 16 Zacks sectors, is expected to record earnings growth in the quarter. The sector is anticipated to witness 5.3% earnings growth on the back of 5.6% higher revenues.

In a nutshell, we believe the fourth quarter is on track to record the highest gains in the last two years on the back of strong gains in actual earnings. Furthermore, the streak of geopolitical surprises over the last year had a momentous impact this earnings season. On this note, a quick throwback to the major events reminds us of Brexit, the Trump saga, the greenback hitting a 13-year high, Fed’s rate hike and last but not the least, the recovery in oil price.

What’s in Store for the Healthcare Space?

Healthcare, a niche subsector in the Medical universe, includes industries like health maintenance organizations (HMOs), also known as health insurers, clinical, laboratories and diagnostics research, medical equipment, hospitals, tele-health services and more.

Of the major positives, HMO industry players are likely to have witnessed an increase in premium from government businesses – Medicare, Medicare Advantage and Medicaid. A surge in the baby boomer population has led to higher demand for these policies. However on the flipside, a disappointing public exchange business and an increasing medical ratio are the concerns.

On the bottom line, despite the uncertainties that the future may unfold, Healthcare stocks are expected to benefit under the new administration. The stocks have also rallied significantly since the election results. In fact, this has always been one of the hottest sectors over the last five years, courtesy of increasing consumer demand for planned healthcare.

Having considered the above factors, let’s take a sneak peek at a few major Healthcare stocks slated to release their fourth-quarter numbers on Feb 14:

Express Scripts Holding Company ESRX: This St. Louis, MO-based pharmacy benefit management (PBM) company operates in the U.S., Canada and Europe.

Notably, Express Scripts does not have an impressive track record of beating estimates in the four trailing quarters. In the last reported quarter, the company’s earnings were in line with estimates, taking the four-quarter average to a negative 0.04%. However, we expect Express Scripts to continue to benefit from increased generic utilization, shift toward mail orders, strong specialty growth and an aging population.

Express Scripts Holding Company Price and EPS Surprise

 

Express Scripts Holding Company Price and EPS Surprise | Express Scripts Holding Company Quote

In fact, our proven model does not conclusively show that the company is likely to beat earnings this quarter either, given the combination of a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%.

That is because, as per our model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat earnings. Simultaneously, 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.

However, we note that Express Scripts has a long-term expected earnings growth rate of 11.8%, instilling investor confidence (read more: Express Scripts Q4 Earnings: What's in the Cards?)

Charles River Laboratories International, Inc CRL: Headquartered in Wilmington, MA, Charles River is an early-stage contract research company that provides drug discovery and preclinical development services globally. The company is scheduled to report its quarterly numbers before the opening bell.

Over the last four trailing quarters, the company posted earnings beats, the average being 6.97%. Furthermore, a long-term expected earnings growth rate of 12.76% raises confidence in the stock.

Charles River Laboratories International, Inc. Price and EPS Surprise

 

Charles River Laboratories International, Inc. Price and EPS Surprise | Charles River Laboratories International, Inc. Quote

Despite the strong prospects, our quantitative model does not conclusively show a beat for the company, given the combination of a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Quintiles Transitional Holdings Inc. Q: Based in Durham, NC, Quintiles provides biopharmaceutical development services and commercial outsourcing services in the Americas, Europe, Africa and the Asia Pacific. With respect to the surprise trend, Quintiles posted an average beat of 6.58% over the last four trailing quarters.

Quintiles Transitional Holdings Inc. Price and EPS Surprise

 

Quintiles Transitional Holdings Inc. Price and EPS Surprise | Quintiles Transitional Holdings Inc. Quote

However, our proven model does not predict an earnings beat for the company this season, thanks to its Zacks Rank #3 and Earnings ESP of 0.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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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Quintiles Transitional Holdings Inc. (Q): Free Stock Analysis Report
 
Express Scripts Holding Company (ESRX): Free Stock Analysis Report
 
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