Boston, MA 08/20/2014 (wallstreetpr) – Investment advisor Goldman Sachs Group Inc (NYSE:GS) predicts that at least three companies from the medical technology sector, C.R. Bard, Inc. (NYSE:BCR), Becton, Dickinson and Co. (NYSE:BDX) and CareFusion Corporation (NYSE:CFN), would stand to gain the most from higher basic utilization among the diagnosis and basic hospital suppliers.
Utilization Levels
With most of the companies from the medical technology sector reported their second quarter financial results, the brokerage said that the medical technology in the U.S. remained stagnant during the June quarter. However, there were macro environment improvements and ACA implementation prompting a big upswing in operating metrics of some hospitals, physician visits, Rx trends, which offered basic utilization judgment.
Analyst David Roman said that he had assumed three possible reasons for the divide between the hospital and the medical technology revenue in the U.S.
Three Reasons
The brokerage said that the first one was that newly-insured patients were more interested in getting basic services than the major procedures to be followed such as reconstruction of large-joint, which fuels most of the revenues for medical technology companies.
Secondly, the analyst said that elders were the consumers of the major procedures, and a portion of the population was covered under healthcare through Medicare before the ACA, which was key to earn more dollars from items like hip implants or ICDs.
Finally, the pricing pressures seemed to have intensified a lot since the balance of purchasing power appears to have moved towards hospitals. The analyst also said that it remains to be seen whether the basic utilization was the sign of consumption for increased health services of the complex nature.
Three Companies To Gain
Therefore, the analyst believes that the three companies from medical technology sector, C.R. Bard, Inc. (NYSE:BCR), Becton, Dickinson and Co. (NYSE:BDX) and CareFusion Corporation (NYSE:CFN) stand to benefit the most from the current scenario as these companies’ results were influenced by diagnosis and basic hospital supplies.
