As innovation continues to shape nearly every industry, the medical sector is no exception. Thanks to cutting-edge technology and AI integration, the industry is experiencing significant growth, driven by increasing demand for advanced healthcare solutions, particularly in diagnostics and surgeries.
Given this backdrop, investors looking for growth opportunities could invest in fundamentally sound medical device stocks Alcon Inc. (ALC), Becton, Dickinson and Company (BDX), and Abbott Laboratories (ABT).
The medical devices industry is on the cusp of significant growth, driven by advancements in technology, increasing healthcare needs, and rising aging populations. Emerging trends like artificial intelligence, robotics, and telemedicine are reshaping how healthcare is delivered, offering more efficient, personalized, and accessible solutions for patients worldwide.
That said, AI has been a game-changer in the industry, driving breakthroughs in predictive diagnostics, remote monitoring, and precision medicine. Innovations like AI-powered diagnostic tools, wearable health devices, and robotic surgery systems are revolutionizing patient care.
The FDA has already authorized 950 AI/ML-enabled medical devices, enhancing the industry’s potential. These technologies promise faster diagnoses, more precise treatments, and significantly improved patient outcomes, positioning AI as a cornerstone in the future of healthcare innovation.
According to a study by KPMG, global annual medical device sales are forecasted to hit $800 billion by 2030. Moreover, as per a study by Mordor Intelligence, the medical devices industry is poised for steady growth as its market size is anticipated to reach $893.07 billion by 2029, exhibiting a CAGR of 7%.
Considering these optimistic trends, let’s take a look at three Medical – Devices & Equipment industry stocks in detail, beginning with #3.
Stock #3: Alcon Inc. (ALC)
Headquartered in Geneva, Switzerland, is an eye care company that offers a range of products through two key segments: Surgical and Vision Care. The Surgical business focuses on ophthalmic products for cataract surgery, while the Vision Care business offers contact lenses and ocular health products.
On September 6, ALC unveiled its latest innovations at the European Society of Cataract and Refractive Surgeons (ESCRS) annual meeting. The SMARTCataract DX digital planning solution, powered by the ARGOS® Biometer, enhances workflow efficiency for practices, positioning ALC as a key player in the eye care sector.
Additionally, ALC introduced the NGENUITY® 1.5 with connectivity capabilities, enabling image-guided 3D cataract surgery with the ARGOS Biometer. This provides superior visualization, driving better outcomes. With the rising global demand for cataract surgeries, ALC's innovations would help meet growing needs while strengthening its industry leadership.
On July 1, ALC completed its acquisition of BELKIN Vision for $81 million, including $65 million in cash. The acquisition expands ALC’s glaucoma portfolio with BELKIN Vision’s Direct Selective Laser Trabeculoplasty (DSLT) technology, securing robust growth opportunities and future advancements in eye care.
ALC’s net sales and other revenues for the fiscal second quarter that ended June 30, 2024, increased 3.1% year-over-year to $2.50 billion. Its gross profit marginally grew from the year-ago value to $1.54 billion. The company’s core net income totaled to $367 million and $0.74 per share, up 7.6% and 7.2% from the prior year’s quarter, respectively.
Analysts expect ALC’s revenue and EPS for the fiscal third quarter (which ended September 2024) to increase 6% and 12.7% year-over-year to $2.47 billion and $0.74, respectively. Also, the company surpassed the consensus EPS estimate in three of four trailing quarters.
Shares of ALC have surged 19.7% over the past six months and 26.3% over the past year to close the last trading session at $94.52.
ALC’s bright prospects are mirrored in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
ALC has an A grade for Stability and a B for Growth. Within the Medical – Devices & Equipment industry, the stock is ranked #36 out of 135 stocks.
Click here to access additional ALC ratings for Momentum, Sentiment, Value, and Quality.
Stock #2: Becton, Dickinson and Company (BDX)
BDX designs, manufactures, and sells medical supplies, devices, laboratory equipment, and diagnostic products. It serves healthcare institutions, physicians, life science researchers, clinical laboratories, and the general public. The business operates through three segments: BD Medical; BD Life Sciences; and BD Interventional.
On October 14, BDX announced the commercial launch of the first in a family of high-throughput, robotics-compatible reagent kits that enable automation to ensure greater consistency and increased efficiency of large-scale, single-cell discovery studies.
With advancements in robotics solutions, BDX could accelerate the pace of discovery in oncology and immunology and gather a significant market presence in the medical devices industry.
On September 18, BDX announced the commercial release of the BDX Neopak XtraFlow Glass Prefillable Syringe and expanded production capacity for its BDX Neopak Glass Prefillable Syringe platform.
By scaling production, BDX is expected to strengthen its position in the prefillable syringe market, supporting the pharmaceutical industry's need for high-quality, efficient drug delivery systems.
During the fiscal third quarter that ended on June 30, 2024, BDX’s adjusted revenues increased 3.7% year-over-year to $5.06 billion. Its operating income grew 9.7% from the prior year to $602 million.
Moreover, the company’s net income was $487 million, reflecting a 19.7% year-over-year growth. Meanwhile, its adjusted EPS rose 18.2% from the previous year’s quarter to $3.50.
Street expects BDX’s revenue and EPS for the fiscal fourth quarter that ended September 2024 to increase 5.2% and 10.1% year-over-year to $5.35 billion and $3.77, respectively. In addition, the company surpassed the consensus EPS estimates in three of the trailing four quarters.
Over the past month, the stock has gained 3.9% to close the last trading session at $240.33.
BDX’s POWR Ratings reflect its robust prospects. It has an overall rating of B, translating to a Buy in our proprietary system.
BDX has a B grade for Growth, Stability, and Sentiment. It is ranked #31 in the 135-stock Medical – Devices & Equipment industry.
Click here to see BDX’s ratings for Value, Momentum, and Quality.
Stock #1: Abbott Laboratories (ABT)
ABT discovers, develops, manufactures, and sells a diverse range of healthcare products. The company operates in four segments: Established Pharmaceutical Products; Diagnostic Products; Nutritional Products; and Medical Devices, delivering comprehensive solutions to address various healthcare needs globally.
On October 10, ABT announced significant milestones to expand its pulsed field ablation (PFA) solutions in electrophysiology. The company completed early enrollment for the VOLT-AF IDE Study, supporting its Volt™ PFA System, and launched the FOCALFLEX trial to evaluate the TactiFlex™ Duo Ablation Catheter, Sensor Enabled™ (SE), for treating patients with paroxysmal atrial fibrillation.
Additionally, ABT received FDA clearance for its Advisor™ HD Grid X Mapping Catheter, Sensor Enabled™, designed to enhance cardiac mapping for both PFA and radiofrequency (RF) ablation cases. The cutting-edge technology ensures precise visualization of cardiac anatomy, driving better outcomes in ablation procedures.
On September 5, ABT announced the U.S. launch of its Lingo Continuous Glucose Monitor, a non-prescription system designed for individuals aiming to enhance their health and wellness through real-time glucose tracking and personalized insights.
With new innovations and FDA clearances, ABT is continuously trying to re-establish itself as a market leader in the pharma landscape and ensuring stable growth prospects for the company in the future.
ABT’s net sales for the fiscal third quarter, which ended September 30, 2024, increased 4.9% year-over-year to $10.64 billion. Its operating earnings grew 12.8% from the year-ago value to $1.86 billion. Moreover, adjusted net earnings came in at $2.12 billion or $1.21 per share, up 6% and 6.1% from the prior year’s period, respectively.
The consensus revenue estimate of $11.03 billion for the fiscal fourth quarter ending December 2024 reflects a rise of 7.8% year-over-year. Its EPS for the same period is expected to increase 12.8% from the prior year’s period to $1.34. Moreover, ABT topped the consensus revenue and EPS estimates in all four trailing quarters.
Shares of ABT have surged 11.3% over the past six months and 28% over the past year to close the last trading session at $117.89.
ABT’s robust fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which translates to a Buy in our proprietary rating system.
ABT has a B grade for Stability and Sentiment. Within the same industry, it is ranked #19. To see ABT’s Growth, Value, Momentum, and Quality ratings, click here.
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ABT shares were unchanged in premarket trading Friday. Year-to-date, ABT has gained 9.24%, versus a 23.68% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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