Hill-Rom (HRC) Rides On Product Launches, Competition Rife

On Oct 3, we issued an updated research report on Hill Rom Holdings, Inc. (NYSE:HRC) . The stock currently has a Zacks Rank #3 (Hold).

Hill-Rom has underperformed the broader industry over the last three months. The stock has lost 5.5% as compared with the industry’s decline of 0.6%. Foreign exchange and stiff competition are potent headwinds. The company’s lowered full-year revenue and earnings guidance is indicative of a persistently sluggish trend.

On a positive note, Hill-Rom is focusing on product innovation through research and development. Also, its product launches slated for the fourth quarter are boosting investors’ confidence. The commercial launch of Centrella Med-Surg platform in this regard is worth a mention. Also, Hill-Rom announced the introduction of a line of safety surgical instruments, which include the Bard Parker SafeSwitch Disposable Scalpel Handle and Scalpel Handle Cover along with Bard Parker Blade Remover.

Additionally, Hill-Rom’s merger and acquisition pipeline is strong. The company aggressively pursues acquisitions to accelerate growth in five key clinical focus areas — advancing patient mobility, wound care and prevention, surgical, safety and efficiency, clinical workflow solutions and respiratory help.

Meanwhile, in order to focus on its core operations, Hill-Rom recently signed an agreement to divest its Volker business to an affiliate of CoBe Capital. Notably, the Volker business primarily serves the long-term care bed market in Europe.

Key Picks

A few better-ranked stocks in the medical sector are Orthofix International N.V. (NASDAQ:OFIX) , Luminex Corporation (NASDAQ:LMNX) and IDEXX Laboratories, Inc. (NASDAQ:IDXX) . Orthofix International and Luminex Corporation sport a Zacks Rank #1 (Strong Buy), while IDEXX Laboratories carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Orthofix International has a long-term expected earnings growth rate of 11.8%. The stock has rallied roughly 32.3% over the last six months.

Luminex has a long-term expected earnings growth rate of 16.3%. The stock has gained 15.7% over the last six months.

IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has gained 36.7% over the last year.

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