Looking at the earnings picture so far, it is quite clear that the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification) has shown more resilience compared to others amid the coronavirus-led economic rout.
While many players within this sector suffered due to production and supply disruptions, several benefited from strong business generation from emergency medical procedures that were unavoidable even amid the pandemic. Also, this sector’s new COVID-19-related healthcare offerings showed huge adoption, thus contributing to Q2 performance.
Medical is one of the two among the 16 major Zacks sectors to have reported year-over-year earnings growth so far this reporting cycle. Going by the latest Earnings Preview, this sector’s scorecard so far reflects 5.6% earnings growth on 5.5% upside in revenues. Overall, earnings are projected to be at break-even level on 1.7% revenue growth.
Integral to the broader Medical sector, Medical Products companies’ business growth has been significantly dampened due to the pandemic and associated stay-at-home restrictions. As expected, many of these companies have come up with lackluster earnings reports so far this reporting cycle. Losses have been steeper this time around due to the full-quarter impact of the coronavirus mayhem.
However, several companies have partially mitigated these downsides, riding on huge market adoption of their COVID-19-related healthcare-support products and services and increased demand for non-elective and critical care procedures.
The Zacks Medical Product sector currently carries a Zacks Sector Rank in the bottom 27% (185 of 253 industries).
Let’s take a look at five Medical Product market leaders scheduled to announce results on Aug 5.
ResMed inc. RMD: This major player in the field of sleep disorder breathing (SDB) is expected to have seen a ramp-up in demand for its critical care products including ventilators, masks and other respiratory devices. This, in turn, is likely to have positively impacted its performance in the fourth quarter of fiscal 2020.
The Zacks Consensus Estimate for the fourth quarter is pegged at earnings per share of 97 cents. Revenues are expected to be $710.9 million.
ResMed has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — which increases the odds of an earnings beat. It has a Zacks Rank #2 (Buy) and an Earnings ESP of +20.93%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ResMed Inc. Price and EPS Surprise
ResMed Inc. price-eps-surprise | ResMed Inc. Quote
AmerisourceBergen Corporation ABC: Sustained growth in specialty product sales and an expanded customer base are likely to have benefited the third-quarter fiscal 2020 performance of AmerisourceBergen. Notably, its Pharmaceutical Distribution segment serves healthcare providers in the pharmaceutical supply channel. The soon-to-be reported quarter’s results are likely to reflect solid organic growth rates in the U.S. pharmaceutical market, population demographics and improvement in patient access to medical care.
AmerisourceBergen has a Zacks Rank #3 and an Earnings ESP of -4.78%.
(Read more: AmerisourceBergen to Post Q3 Earnings: What's in Store?)
AmerisourceBergen Corporation Price and EPS Surprise
AmerisourceBergen Corporation price-eps-surprise | AmerisourceBergen Corporation Quote
Varian Medical Systems, Inc. VAR: Varian’s solid Oncology platform is expected to have driven fiscal third-quarter performance. Particularly, the Protons Solutions business is likely to have driven growth.
Varian Medical has a Zacks Rank #3 and an Earnings ESP of 0.00%.
(Read more: Varian to Report Q3 Earnings: What's in the Offering?)
Varian Medical Systems, Inc. Price and EPS Surprise
Varian Medical Systems, Inc. price-eps-surprise | Varian Medical Systems, Inc. Quote
Perrigo Company plc PRGO: The addition of products following the acquisition of Ranir Global Holdings is likely to have boosted sales of Perrigo’s Consumer Self Care Americas (CSCA) and Consumer Self Care International (CSCI) segments in the second quarter. Moreover, the new products have been witnessing significant sales — a trend that most likely continued in the soon-to-be-reported quarter.
Perrigo has a Zacks Rank #4 (Sell) and an Earnings ESP of +0.19%.
(Read more: What's in Store for Perrigo This Earnings Season?)
Perrigo Company plc Price and EPS Surprise
Perrigo Company plc price-eps-surprise | Perrigo Company plc Quote
Globus Medical, Inc. GMED: Sustained growth in the U.S. Spine business along with an array of product launches are likely to have benefited the company’s second-quarter 2020 performance. However, international sales may have faced COVID-19-led business disruption.
An earnings beat looks likely for Globus Medical as it has an Earnings ESP of +10.13% and a Zacks Rank #3.
Globus Medical, Inc. Price and EPS Surprise
Globus Medical, Inc. price-eps-surprise | Globus Medical, Inc. Quote
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AmerisourceBergen Corporation (ABC) : Free Stock Analysis Report
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