The healthcare sector’s Q3 earnings season is off to a strong start, driven by factors like outpatient demand, premium rate increases, and rising interest in commercial health plans. However, escalating medical costs pose a challenge. Stocks like Humana Inc. (HUM), Cencora, Inc. (COR), and Globus Medical, Inc. (GMED) are poised to beat earnings estimates.

The medical sector is forecasted to experience a 2.9% decline in earnings but a 9.1% rise in revenues for Q3. Despite strong sales growth in healthcare, profitability is under pressure due to increased expenses from technology investments and rising wages. Patient volumes have increased, but higher utilization has led to higher costs, impacting margins.

Healthcare companies are countering cost pressures with premium rate increases and technological innovations. AI and automation are improving clinical workflows and efficiency, while new products and digital capabilities are boosting health insurers. The sector is adapting to meet demand for affordable healthcare options and government plan redeterminations.

Humana Inc., Cencora, Inc., and Globus Medical, Inc. are identified as potential outperformers in the healthcare sector. Humana’s Q3 revenue estimate is $31.98 billion, with an EPS estimate of $2.91. Cencora’s earnings are expected to benefit from GLP-1 drugs sales, while Globus Medical’s growth is driven by rising domestic and international sales and acquisitions.

Humana Inc. (HUM) has an Earnings ESP of +4.29% and a Zacks Rank #2. Cencora, Inc. (COR) has an Earnings ESP of +0.31% and a Zacks Rank #3. Globus Medical, Inc. (GMED) has an Earnings ESP of +1.69% and a Zacks Rank #3. These companies have a history of beating earnings estimates and show potential for growth in Q3.

Read more at Nasdaq: Prescription for Beats: 3 Healthcare Stocks Set to Outperform in Q3