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3 medical products stocks poised to beat this earnings season

Despite the resurgences of COVID-19, so far the fourth quarter reporting cycle has shown improvement for the Medical products companies in the wider medical sector. It should be mentioned that the Medical is expected to be one of the seven fastest growing sectors in earnings in the fourth quarter.

By the last Earnings overview, 33.9% of companies in the medical sector, accounting for nearly 53.7% of the market capitalization of the sector, reported profits through February 2. Profits improved 10% year over year on revenue up 12.1%. A total of 36.8% of corporate earnings and revenue beat Zacks’ consensus estimate.

This dashboard highlights stability in the United States, thanks to the continued economic reopening amid the resurgence of COVID-19 cases. However, this resurgence has led to supply chain disruptions that persist. Additionally, several of the international markets affected by COVID are still suffering due to lower cash flow and difficult economic conditions.

Companies in the medical products sector saw a sequential decline in collective business versus legacy core business in the third quarter. On a positive note, the fourth quarter reporting cycle so far has shown a recovery in these activities despite the resurgence of COVID-19. The substantial increase in vaccination campaigns has helped people gradually return to pre-pandemic normality. This, in turn, has likely resulted in some recovery in hospital visits and core hospital activities in the current reporting cycle, which in turn may have boosted non-COVID legacy activities and electives in the medical sector. Although companies are seeing a sequential recovery in their core business, the improvement in the overall trend is still below pre-COVID levels.

Meanwhile, due to the resurgence of COVID-19 and rising case numbers, manufacturers of tests, vaccines and therapeutics have witnessed massive market uptake of their products and services. of COVID-related healthcare support in the fourth quarter. Diagnostic test stocks have so far seen phenomenal growth, driven by an increase in demand for COVID-19 tests, in line with industry trends. For example, in the fourth trimester, Abbott Laboratories‘ABT’s underlying legacy diagnostic activity continued to improve. This was due to strong sales of ABT’s COVID-19 tests thanks to strong demand for the BinaxNOW, Panbio and ID NOW rapid test platforms. Sales of Abbott’s rapid diagnostics and point-of-care diagnostics both grew organically.

Stocks set to beat fourth-quarter earnings estimates

Given the high degree of diversity in the medical products industry, finding the right stocks with the potential to beat estimates could be quite a task.

However, our proprietary Zacks methodology makes this quite simple.

We focus on actions that combine a positive effect ESP Earnings and a Zacks rank #1 (strong buy), 2 (buy) or 3 (hold). You can see the full list of today’s Zacks #1 Rank stocks here.

Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.

The ESP of earnings provides the percentage difference between the most accurate estimate and the Zacks consensus estimate. You can discover the best stocks to buy or sell before they’re flagged with our Income ESP filter.

Here we feature three stocks that are expected to top earnings estimates in this reporting cycle.

Baxter International, Inc. BAX: Increased demand for acute therapy products due to the COVID-19 pandemic, and continuous renal replacement therapy (CRRT), related devices and consumables are likely to have boosted Acute business performance Baxter’s Therapies in Q4 2021. BAX’s strong product pipeline and expected launch of therapies and products may be reflected in Q4 revenue.

The combination of Baxter’s ESP gains of +3.50% and a Zacks #2 ranking raises the possibility of an earnings surprise in the quarter to report.

The company is expected to release its fourth quarter results on Feb. 17, before the market opens.

Baxter International Inc. Awards and EPS Surprise

Baxter International Inc. price-eps-surprise | Baxter International Inc. Quote

Henry Schein, Inc. HSIC: According to the third quarter 2021 earnings call, the company has seen stronger demand in the global dental and medical markets as practices gradually reopen and global patient traffic has stabilized over the past few months. months, even in countries with stricter lockdown rules. . This recovery trend is expected to have continued through the fourth quarter, boosting the company’s revenue.

HSIC is expected to release its fourth quarter 2021 results on February 15.

Henry Schein has a +1.94% Earnings ESP and a #2 Zacks rank.

Henry Schein, Inc. Awards and EPS Surprise

Henry Schein, Inc. Awards and EPS Surprise

Henry Schein, Inc. price-eps-surprise | Quote from Henry Schein, Inc.

DENTSPLY SIRONA Inc. XRAY: DENTSPLY SIRONA’s Consumables segment is expected to have seen improved revenue in the fourth quarter. The rebound in sales of all product categories may have contributed to the increase. The Technology & Equipment segment may have shown growth in the reportable quarter, driven by recovery across all product categories.

XRAY is expected to report its fourth quarter 2021 results on February 28.

DENTSPLY SIRONA has a Gain ESP of +1.06% and a Zacks Rank #3.

DENTSPLY SIRONA Inc. Price and EPS Surprise

DENTSPLY SIRONA Inc. Price and EPS Surprise

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

Stay up to date with upcoming results announcements with the Zacks Earnings Schedule.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Joan J. Dean

The author Joan J. Dean