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5 Large-Cap Medical Stocks to Buy Ahead of Q1 Earnings
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The first-quarter 2024 earnings season is in full swing. So far, earnings results are better than expected. As of Apr 17, 48 companies on the S&P 500 Index have reported their financial numbers. Total earnings for these 48 index members are up 9.5% from the same period last year on 4.5% higher revenues, with 77.1% beating EPS estimates and 64.6% beating revenue estimates.
At present, total earnings of the S&P 500 Index in first-quarter 2024 are expected to be up 2.9% on 3.8% higher revenues. This follows the 6.8% earnings growth on 4% higher revenues in fourth-quarter 2023 and 3.8% earnings growth on 2.2% higher revenues in third-quarter 2023.
Meanwhile, a few large-cap medical stocks from the S&P 500 stable are set to beat on earnings. A handful of them currently carry a favorable Zacks Rank. The combination of a favorable Zacks Rank and an earnings beat should drive their stock prices in the near term.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of our five picks in the last quarter.
Image Source: Zacks Investment Research
HCA Healthcare Inc.’s (HCA - Free Report) revenues are likely to have increased on the back of a surge in admissions and outpatient surgeries. HCA expects equivalent admissions to have grown in the range of 3-4% in 2024. Significant growth in its Managed Medicare operations is expected to drive its performance.
Multiple buyouts have aided in increasing patient volumes, enabled network expansion and added hospitals to the portfolio. EPS is predicted within $19.7-$21.2 in 2024, higher than the 2023 figure. The company has been gaining from its telemedicine business line. HCA resorts to prudent capital deployment via share buybacks and dividend payments.
HCA Healthcare has an Earnings ESP of +13.46%. It has an expected earnings growth rate of 8.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last seven days.
HCA Healthcare recorded earnings surprises in three out of the last four reported quarters, with an average beat of 9.8%. The company is set to release earnings results on Apr 26, before the opening bell.
Edwards Lifesciences Corp. (EW - Free Report) exited 2023 with substantial growth across each of its four product groups and is committed to advancing its leadership in surgical structural heart therapies. The strategic spin-off of Critical Care aims to boost EW’s R&D and innovations, allowing for a sharper focus on structural heart disease.
The ongoing global expansion of the PASCAL Precision platform and the European launch of the EVOQUE system are hailed as significant milestones for EW within TMTT. The SAPIEN 3 Ultra RESILIA platform continues its strong uptake in the United States. We assume a 9.8% CAGR growth in EW’s revenues through 2026.
Edwards Lifesciences has an Earnings ESP of +1.68%. It has an expected earnings growth rate of 10% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 90 days.
Edwards Lifesciences recorded earnings surprises in two out of the last four reported quarters, with an average beat of 0.8%. The company is set to release earnings results on Apr 25, after the closing bell.
Laboratory Corp. of America Holdings (LH - Free Report) enters 2024 demonstrating strong momentum in both diagnostic laboratories and biopharma laboratory services businesses. The continued strength of Central Labs is driving the success of the biopharma segment. Following the Fortrea spin-off, LH expects to better meet customer needs, drive sustainable and profitable growth and deliver attractive shareholder returns.
LH will continue to develop and expand the global reach of its specialty testing, including Companion Diagnostics. In addition, LH is on track to achieve the targeted $350 million savings with the Launchpad initiative. With a robust M&A pipeline, LH is focused on driving growth through healthcare system partnerships.
Laboratory Corp. of America has an Earnings ESP of +1.07%. It has an expected earnings growth rate of 9.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 30 days. The company is set to release earnings results on Apr 25, before the opening bell.
Universal Health Services Inc.’s (UHS - Free Report) Acute Care and Behavioral Health businesses have been contributing to the top-line growth. An increase in the number of licensed beds in acute care hospitals and behavioral health centers has been a major driver for UHS.
Acquisitions play an instrumental role in building its growth trajectory by adding facilities to UHS’ portfolio. UHS has a strong liquidity position for pursuing growth initiatives and deployment of capital via buybacks and dividends.
Universal Health Services has an Earnings ESP of +8.56%. It has an expected earnings growth rate of 26.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the last 60 days.
Universal Health Services recorded earnings surprises in the last four reported quarters, with an average beat of 5.9%. The company is set to release earnings results on Apr 24, after the closing bell.
Insulet Corp. (PODD - Free Report) has been progressing well with its four-pillar strategy that targets focused market expansion and innovation. PODD is moving ahead with respect to its development roadmap of the Omnipod 5 system. The international rollout of the device continues successfully.
In 2023, PODD commercially launched Omnipod 5 in the United Kingdom and Germany. Further, Insulet registered continued strong adoption of Omnipod DASH in its international markets. In terms of innovation, in February 2024, PODD received the CE mark for the added compatibility of Omnipod 5 with the Abbott FreeStyle Libre 2 Plus sensor.
Insulet has an Earnings ESP of +11.11%. It has an expected earnings growth rate of 12% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 21.3% over the last 60 days.
Insulet recorded earnings surprises in the last four reported quarters, with an average beat of 100.1%. The company is set to release earnings results on May 9, after the closing bell.
Image: Shutterstock
5 Large-Cap Medical Stocks to Buy Ahead of Q1 Earnings
The first-quarter 2024 earnings season is in full swing. So far, earnings results are better than expected. As of Apr 17, 48 companies on the S&P 500 Index have reported their financial numbers. Total earnings for these 48 index members are up 9.5% from the same period last year on 4.5% higher revenues, with 77.1% beating EPS estimates and 64.6% beating revenue estimates.
At present, total earnings of the S&P 500 Index in first-quarter 2024 are expected to be up 2.9% on 3.8% higher revenues. This follows the 6.8% earnings growth on 4% higher revenues in fourth-quarter 2023 and 3.8% earnings growth on 2.2% higher revenues in third-quarter 2023.
Meanwhile, a few large-cap medical stocks from the S&P 500 stable are set to beat on earnings. A handful of them currently carry a favorable Zacks Rank. The combination of a favorable Zacks Rank and an earnings beat should drive their stock prices in the near term.
Our Top Picks
We have narrowed our search to five S&P 500 medical stocks that are poised to beat on first-quarter earnings results. Each of these stocks carries a Zacks Rank #2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of our five picks in the last quarter.
Image Source: Zacks Investment Research
HCA Healthcare Inc.’s (HCA - Free Report) revenues are likely to have increased on the back of a surge in admissions and outpatient surgeries. HCA expects equivalent admissions to have grown in the range of 3-4% in 2024. Significant growth in its Managed Medicare operations is expected to drive its performance.
Multiple buyouts have aided in increasing patient volumes, enabled network expansion and added hospitals to the portfolio. EPS is predicted within $19.7-$21.2 in 2024, higher than the 2023 figure. The company has been gaining from its telemedicine business line. HCA resorts to prudent capital deployment via share buybacks and dividend payments.
HCA Healthcare has an Earnings ESP of +13.46%. It has an expected earnings growth rate of 8.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last seven days.
HCA Healthcare recorded earnings surprises in three out of the last four reported quarters, with an average beat of 9.8%. The company is set to release earnings results on Apr 26, before the opening bell.
Edwards Lifesciences Corp. (EW - Free Report) exited 2023 with substantial growth across each of its four product groups and is committed to advancing its leadership in surgical structural heart therapies. The strategic spin-off of Critical Care aims to boost EW’s R&D and innovations, allowing for a sharper focus on structural heart disease.
The ongoing global expansion of the PASCAL Precision platform and the European launch of the EVOQUE system are hailed as significant milestones for EW within TMTT. The SAPIEN 3 Ultra RESILIA platform continues its strong uptake in the United States. We assume a 9.8% CAGR growth in EW’s revenues through 2026.
Edwards Lifesciences has an Earnings ESP of +1.68%. It has an expected earnings growth rate of 10% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 90 days.
Edwards Lifesciences recorded earnings surprises in two out of the last four reported quarters, with an average beat of 0.8%. The company is set to release earnings results on Apr 25, after the closing bell.
Laboratory Corp. of America Holdings (LH - Free Report) enters 2024 demonstrating strong momentum in both diagnostic laboratories and biopharma laboratory services businesses. The continued strength of Central Labs is driving the success of the biopharma segment. Following the Fortrea spin-off, LH expects to better meet customer needs, drive sustainable and profitable growth and deliver attractive shareholder returns.
LH will continue to develop and expand the global reach of its specialty testing, including Companion Diagnostics. In addition, LH is on track to achieve the targeted $350 million savings with the Launchpad initiative. With a robust M&A pipeline, LH is focused on driving growth through healthcare system partnerships.
Laboratory Corp. of America has an Earnings ESP of +1.07%. It has an expected earnings growth rate of 9.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 30 days. The company is set to release earnings results on Apr 25, before the opening bell.
Universal Health Services Inc.’s (UHS - Free Report) Acute Care and Behavioral Health businesses have been contributing to the top-line growth. An increase in the number of licensed beds in acute care hospitals and behavioral health centers has been a major driver for UHS.
Acquisitions play an instrumental role in building its growth trajectory by adding facilities to UHS’ portfolio. UHS has a strong liquidity position for pursuing growth initiatives and deployment of capital via buybacks and dividends.
Universal Health Services has an Earnings ESP of +8.56%. It has an expected earnings growth rate of 26.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the last 60 days.
Universal Health Services recorded earnings surprises in the last four reported quarters, with an average beat of 5.9%. The company is set to release earnings results on Apr 24, after the closing bell.
Insulet Corp. (PODD - Free Report) has been progressing well with its four-pillar strategy that targets focused market expansion and innovation. PODD is moving ahead with respect to its development roadmap of the Omnipod 5 system. The international rollout of the device continues successfully.
In 2023, PODD commercially launched Omnipod 5 in the United Kingdom and Germany. Further, Insulet registered continued strong adoption of Omnipod DASH in its international markets. In terms of innovation, in February 2024, PODD received the CE mark for the added compatibility of Omnipod 5 with the Abbott FreeStyle Libre 2 Plus sensor.
Insulet has an Earnings ESP of +11.11%. It has an expected earnings growth rate of 12% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 21.3% over the last 60 days.
Insulet recorded earnings surprises in the last four reported quarters, with an average beat of 100.1%. The company is set to release earnings results on May 9, after the closing bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.