The medical device industry should see a stand-out year in 2019, according to a Moody’s report on the industry, Medtech Dive reports.
The financial services company predicts a positive outlook for medtech, with forecasted earnings before interest, tax, depreciation and amortization of between 4.5% and 5.5% for companies on an organic basis, according to the report.
The positive outlook for medtech stands out from the rest of the healthcare field, with pharmaceuticals and U.S. for-profit hospitals only receiving a stable outlook, Medtech Dive reports.
Revenue growth for device companies will be driven through innovation for most companies and categories, with sales in emerging markets expected to grow more than 10%, according to the report.
Synergies from recent acquisitions, such as Becton Dickinson & Co.‘s (NYSE:BDX) $24 billion acquisition of C.R. Bard which closed last December, are likely to be a boost to operating margins in the coming year, Medtech Dive reports.
A handful of companies were referenced in the Moody’s report, including Abbott (NYSE:ABT), which it expects will see meaningful growth drivers in its FreeStyle Libre blood glucose device and MitraClip transcatheter mitral heart valve. Moody’s expects Zimmer Biomet (NYSE:ZBH) will improve its cost structure at U.S.-based manufacturing facilities next year as well, according to the report.
The future isn’t entirely without challenges for medtech, however, with Moody’s noting rising trade tensions and the possible return of the medical device excise tax in 2020 as noted hurdles for the industry.