5 Drug Stocks Poised To Beat Earnings Estimates In Q4

A positive earnings picture continues to emerge from the fourth-quarter earnings season with both earnings and revenue growth improving compared to recent quarters. As of Feb 8, 319 S&P 500 members or 76.3% of the index’s total market capitalization had reported results -- the numbers show that earnings are up 5.8% on revenue growth of 4.5% with 69.6% beating earnings estimates and 54.5% topping revenue expectations.

Standout sectors so far this quarter include Finance, Aerospace, Construction, Basic Materials, Consumer Staples, Business Services and Medical. While Q3 was a turnaround quarter for the S&P 500 index after five quarters of back-to-back declines, current expectations for Q4 show earnings growth of 7.3% on revenue growth of 3.9%.

What’s in Store for the Rest of the Quarter

12 of the 16 Zacks sectors are expected to record positive earnings growth this quarter with Finance leading the group on the back of expected earnings growth of 20.7%, followed by Aerospace (13.6%). Meanwhile, with several pharma and biotech stocks yet to report earnings and the Medical sector expected to record earnings growth of 5.3% on revenue growth of 5.7% in Q4, it makes sense to select stocks from this sector that are expected to do well in Q4. Investing in such stocks could prove beneficial for investors as an earnings beat usually leads to significant share price appreciation. Medical is one of the few sectors that has consistently recorded earnings growth over the last 4 quarters.

5 Drug Stocks Set to Be Winners in the Q4 Earnings Season

With the help of the Zacks Stock Screener, we have zeroed-in on five drug stocks that sport a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) and have an Earnings ESP of at least 5%. Earnings ESP is a very valuable tool for investors looking for stocks that are most likely to beat earnings estimates. Moreover, adding a Zacks Rank of #1, 2 or 3 has produced a positive surprise 70% of the time. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or ...

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