Johnson & Johnson and Zimmer Biomet are among the medical device companies that Moody's Investors Service expects to be most negatively affected by the COVID-19 pandemic, MedTech Dive reported.
Moody's lowered its earnings forecast for the medical device industry for the next 12 to 18 months and expects earnings to be flat, down from its previous prediction of 2 percent to 4 percent growth.
Because J&J's medical device unit and Zimmer rely heavily on elective procedures for their sales, they are expected to suffer the greatest earnings loss due to the pandemic, as elective surgeries were widely canceled to prioritize COVID-19 patient care. Moody's predicted both companies will lose 15 percent or more in sales earnings this year, according to MedTech Dive.
Companies that don't rely as heavily on elective procedures, such as Abbott Laboratories and Becton Dickinson, are expected to fare much better, losing 5 percent in sales earnings at most.
Moody's analysts said they believe a recovery in 2021 will fail to fully offset the losses of elective procedures, MedTech Dive reported. But analysts said they expect revenue and earnings trends to return to 2019 levels next year.
Analysts said their forecast is still subject to "many significant uncertainties," MedTech Dive reported.
Read the full article here.