Yahoo Finance 3 Best MedTech Growth Stocks to Bet On in 2021 Amid Pandemic
With half of 2021 behind us, the COVID-19 pandemic continues to keep investors on tenterhooks. And to make matters more concerning, the news about the highly-transmissible coronavirus Delta variant (can become the dominant strain in the next two to three weeks) has made market watchers even more apprehensive along with the people of the United States and healthcare professionals.
Although vaccination is in full swing, the buzz about the aforementioned dominant strain can put a halt on President Biden’s Jul 4 mass vaccination target.
However, there is no need to go into panic mode just yet. Since the beginning of this year, MedTech space has been exhibiting recovery and gaining steam on expectations of the economy getting back to full-fledged reopening and normalization based on the mass vaccination mission.
With uncertainty still looming, it would be a prudent decision to capitalize on the MedTech space, which showed considerable resilience last year despite the pandemic-induced disruption. Let us delve deeper.
MedTech in 2021: Promising Prospects
The pandemic highlighted the importance of digital health, which contributed significantly to MedTech’s performance last year amid the crisis. Riding on this momentum, digital health will grow stronger this year. Companies involved in telemedicine and artificial intelligence will continue to reap the benefits.
Also, the pandemic led to a change in business models, with companies leaning toward virtualized, remote-operated business models for medical care that, in turn, have helped them recover and attain pre-COVID-19 levels.
Additionally, the passing of the stimulus package has provided a necessary impetus to the companies involved in the diagnostic testing space, vaccine distribution and manufacturing of personal protective equipment (PPE). For instance, Becton, Dickinson and Company BDX, which has been at the forefront of the fight against the pandemic, stands to benefit immensely from the package as it will be able to boost its testing capabilities further.
With the increasing dependence on self-monitoring tools, the wearable devices space continues to show strength. Innovation and commitment to develop more advanced devices have instilled optimism in investors as the space has the potential to offer bankable returns.
3 Lucrative MedTech Stocks to Watch Out For
Going by the aforementioned discussion, investors can choose to invest in stocks that have shown tremendous promise amid this health crisis and challenging market conditions, and have growth potential.
To narrow down the list, we have selected three stocks with a Growth Score of A or B. Our research shows that stocks with a Growth Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best upside potential. You can see the complete list of today’s Zacks #1 Rank stocks here.
Our first pick is National Vision Holdings, Inc. EYE, one of the largest optical retail companies in the United States, which has been gaining from increased demand for low-cost eye exams, glasses and contact lenses. The company’s strategy for 2021 looks encouraging. It plans to continue executing on core growth initiatives and investing further to strengthen competitive advantages. The Zacks Rank #1 company had a strong start with 25 openings in the first quarter and continues to plan to open about 75 stores in 2021.
Moreover, the company’s raised 2021 guidance is encouraging and indicative of the bullish trend. Net revenues are expected to be $1.975-$2.025 billion (an improvement from the previously announced $1.93-$1.98 billion). Adjusted earnings per share (EPS) estimates have also been raised to $1.07-$1.12 (up from the previously stated 88-93 cents). Its projected EPS growth for 2021 stands at 19.8% compared with the industry’s projection of 13.6%. The company has a Growth Score of A. Shares of the company have gained 12.9% on a year-to-date basis compared with the industry’s growth of 4.4%.
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The next one is West Pharmaceutical Services, Inc. WST, a leading global manufacturer with respect to design and production of technologically advanced, high-quality, integrated containment and delivery systems for injectable drugs and healthcare products. The Zacks Rank #2 company exhibited robust performance in the first quarter aided by solid organic sales growth in both of its base businesses and growing demand for products related to COVID-19 vaccines. Also, the company’s high-value products (HVP) continue to drive higher gross and operating margins. Additionally, a raised 2021 outlook is encouraging. The company has a Growth Score of B.
Net sales for full-year 2021 are projected to range between $2.63 billion and $2.65 billion (up from the prior range of $2.50-$2.53 billion). Organic sales growth is estimated to be 19-20% (up from the prior range of 13-14%). Adjusted earnings per share for 2021 is anticipated in the band of $6.95 to $7.10 (up from the previous range of $6-$6.15 per share). Its projected EPS growth for 2021 stands at a solid 50.4% compared with the industry’s projection of 22.9%. Year-to-date, shares of the company have appreciated 26.8% compared with the industry’s 9.2% growth.
Our final pick is Henry Schein, Inc. HSIC, a leading distributor of health care products and services across the globe, which displayed robust first-quarter 2021 performance courtesy of strength in three operating arms and solid international results, which buoy optimism. The company boosted its dental business with the acquisition of a majority ownership position in eAssist Dental Solutions and Jarvis Analytics in June and May, respectively. Strength in the company’s Henry Schein One portfolio also looks impressive. A raised 2021 earnings outlook is also promising. The Zacks Rank #1 company’s projected EPS growth for 2021 stands at 35.7% on a year-to-date basis compared with the industry’s projection of 22.9%.
Henry Schein has a Growth Score of B. Shares of the company have gained 11% compared with the industry’s growth of 9.3%.
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Becton, Dickinson and Company (BDX) : Free Stock Analysis Report
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