Goldman: Most Healthcare Companies Will Meet Consensus EPS Forecasts

Goldman Sachs says, “Concerns over EU volumes, the US economy, and FX have dominated our dialogue with investors throughout the second quarter. Negative preannouncements from Inverness Medical IMA and Conceptus CPTS further supported investor concerns. We think most companies will meet consensus EPS forecasts. We see some downside on the top line as relates to currency moves but anticipate cost-cutting measures and financial leverage will serve as an offset. The bigger issue will be guidance, in our view. “ “Assuming that 45%-50% of sales in our coverage universe are generated outside the US (OUS), FX should reduce reported top-line growth in 2H2010 by 440 bp and 2011 by 70 bp-80 bp. Based on current rates, we peg reported growth for largecap stocks in our coverage group at 4.8% in 2011 with bottom-line growth in the 13%-14% range, both of which are below consensus. We would expect Street numbers to come down during 2Q2010 results for several names in our group,” the analysts say. According to Goldman Sachs, “We see room for upside to our numbers and the Street’s for Hospira (based on greater sales of Oxaliplatin and share gains in pumps vs. Baxter). We think the key will be for the company to beat and raise guidance by more than the upside in 2Q. For Zimmer, we think the company will meet 2Q2010 estimates and reiterate 2010 guidance, which we think should be sufficient to sustain a positive move in the shares, given lingering concerns over international market growth.” More Analyst Color here.