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5 Drug/Biotech Stocks Set to Outpace Q3 Earnings Estimates
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The third-quarter earnings season so far has been a mixed bag for drug/biotech companies. While Merck, Gilead, Amgen, Biogen & J&J beat estimates for both earnings and sales, Sanofi and Lilly missed on both counts. Others like Pfizer, Novartis and Glaxo beat estimates for earnings while missing the same for sales.
As expected, almost all companies witnessed improvement in demand trends as global economies began to recover. However, most said that the pace of recovery was slower than expected due to rising cases of infections. Sales and profits were impacted by COVID-19 in the third quarter in various degrees for different companies. Most companies maintained a cautious outlook for the fourth quarter with some retaining or tightening 2020 outlooks.
Per the Zacks classification, the pharma/biotech industry comes under the broader Medical sector, which comprises pharma/biotech as well as medical device companies.
Per the Earnings Trends report as of Oct 28, 36.4% of the companies in the Medical sector, constituting nearly 58.6% of the sector’s market capitalization, reported earnings. While 90% beat earnings estimates, 85.0% beat the same for sales. Earnings increased 8% year over year on 12.1% higher revenues. Overall, third-quarter earnings for the Medical sector are expected to rise 8% on 10.2% sales increase.
Zeroing in on Winners
Here we have highlighted five drug/biotech companies, which are expected to deliver an earnings surprise in their upcoming quarterly results.
Earnings ESP is our proprietary methodology for determining the stocks that have the best chance to deliver an earnings surprise. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. The selection can be done with the help of the Zacks Stock Screener.
Our research shows that for stocks with this combination, the chance of an earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
This San Diego, CA based biotech, focused on the development of medicines for central nervous system (CNS) disorders, has an Earnings ESP of +3.69% and a Zacks Rank of 3. The Zacks Consensus Estimate for the third quarter is pegged at a loss of 38 cents per share. The company is scheduled to release results on Nov 4
This Cambridge, MA-based biotech has an Earnings ESP of +4.23% and a Zacks Rank #3. The Zacks Consensus Estimate for the third quarter is pegged at a loss of $1.75 per share. Alnylam beat estimates in three of the last four quarters while missing in one with the average surprise being 7.22%. The company is scheduled to release results on Nov 5.
Alnylam Pharmaceuticals, Inc. Price and EPS Surprise
This Germany-based cancer biotech has as an Earnings ESP of +21.74% and a Zacks Rank of #3. The Zacks Consensus Estimate for the third quarter is pegged at a loss of 46 cents per share.
In the trailing four quarters, BioNTech beat estimates in two quarters and missed in the other two with the average negative surprise being 15.08%. The company is scheduled to release results on Nov 11.
Biohaven Pharmaceutical Holding Company (BHVN - Free Report)
This New Haven, CT, based commercial-stage biotech has an Earnings ESP of +0.53% and is #3 Ranked. The Zacks Consensus Estimate for the quarter stands at a loss of $2.74 per share. Biohaven Pharmaceutical’s earnings missed expectations in three of the last four quarters while beating in one with the average negative surprise being 10.99%. The company is scheduled to release results on Nov 9
Biohaven Pharmaceutical Holding Company Ltd. Price and EPS Surprise
This Cambridge, MA based clinical-stage gene therapy company has as an Earnings ESP of +4.97% and a Zacks Rank of #3. The Zacks Consensus Estimate for the third quarter is pegged at a loss of 81 cents per share.
In the trailing four quarters, AVROBIO missed estimates in three quarters and beat in one with the average negative surprise being 10.08%.
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
5 Drug/Biotech Stocks Set to Outpace Q3 Earnings Estimates
The third-quarter earnings season so far has been a mixed bag for drug/biotech companies. While Merck, Gilead, Amgen, Biogen & J&J beat estimates for both earnings and sales, Sanofi and Lilly missed on both counts. Others like Pfizer, Novartis and Glaxo beat estimates for earnings while missing the same for sales.
As expected, almost all companies witnessed improvement in demand trends as global economies began to recover. However, most said that the pace of recovery was slower than expected due to rising cases of infections. Sales and profits were impacted by COVID-19 in the third quarter in various degrees for different companies. Most companies maintained a cautious outlook for the fourth quarter with some retaining or tightening 2020 outlooks.
Per the Zacks classification, the pharma/biotech industry comes under the broader Medical sector, which comprises pharma/biotech as well as medical device companies.
Per the Earnings Trends report as of Oct 28, 36.4% of the companies in the Medical sector, constituting nearly 58.6% of the sector’s market capitalization, reported earnings. While 90% beat earnings estimates, 85.0% beat the same for sales. Earnings increased 8% year over year on 12.1% higher revenues. Overall, third-quarter earnings for the Medical sector are expected to rise 8% on 10.2% sales increase.
Zeroing in on Winners
Here we have highlighted five drug/biotech companies, which are expected to deliver an earnings surprise in their upcoming quarterly results.
Earnings ESP is our proprietary methodology for determining the stocks that have the best chance to deliver an earnings surprise. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. The selection can be done with the help of the Zacks Stock Screener.
Our research shows that for stocks with this combination, the chance of an earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
5 Drug/Biotech Stocks That Match the Criteria
ACADIA Pharmaceuticals (ACAD - Free Report)
This San Diego, CA based biotech, focused on the development of medicines for central nervous system (CNS) disorders, has an Earnings ESP of +3.69% and a Zacks Rank of 3. The Zacks Consensus Estimate for the third quarter is pegged at a loss of 38 cents per share. The company is scheduled to release results on Nov 4
You can see the complete list of today’s Zacks #1 Rank stocks here
ACADIA beat estimates in three of the last four quarters while missing in one with the average earnings surprise being 13.03%.
ACADIA Pharmaceuticals Inc. Price and EPS Surprise
ACADIA Pharmaceuticals Inc. price-eps-surprise | ACADIA Pharmaceuticals Inc. Quote
Alnylam Pharmaceuticals (ALNY - Free Report)
This Cambridge, MA-based biotech has an Earnings ESP of +4.23% and a Zacks Rank #3. The Zacks Consensus Estimate for the third quarter is pegged at a loss of $1.75 per share. Alnylam beat estimates in three of the last four quarters while missing in one with the average surprise being 7.22%. The company is scheduled to release results on Nov 5.
Alnylam Pharmaceuticals, Inc. Price and EPS Surprise
Alnylam Pharmaceuticals, Inc. price-eps-surprise | Alnylam Pharmaceuticals, Inc. Quote
BioNTech (BNTX - Free Report)
This Germany-based cancer biotech has as an Earnings ESP of +21.74% and a Zacks Rank of #3. The Zacks Consensus Estimate for the third quarter is pegged at a loss of 46 cents per share.
In the trailing four quarters, BioNTech beat estimates in two quarters and missed in the other two with the average negative surprise being 15.08%. The company is scheduled to release results on Nov 11.
BioNTech SE Sponsored ADR Price and EPS Surprise
BioNTech SE Sponsored ADR price-eps-surprise | BioNTech SE Sponsored ADR Quote
Biohaven Pharmaceutical Holding Company (BHVN - Free Report)
This New Haven, CT, based commercial-stage biotech has an Earnings ESP of +0.53% and is #3 Ranked. The Zacks Consensus Estimate for the quarter stands at a loss of $2.74 per share. Biohaven Pharmaceutical’s earnings missed expectations in three of the last four quarters while beating in one with the average negative surprise being 10.99%. The company is scheduled to release results on Nov 9
Biohaven Pharmaceutical Holding Company Ltd. Price and EPS Surprise
Biohaven Pharmaceutical Holding Company Ltd. price-eps-surprise | Biohaven Pharmaceutical Holding Company Ltd. Quote
AVROBIO (AVRO - Free Report)
This Cambridge, MA based clinical-stage gene therapy company has as an Earnings ESP of +4.97% and a Zacks Rank of #3. The Zacks Consensus Estimate for the third quarter is pegged at a loss of 81 cents per share.
In the trailing four quarters, AVROBIO missed estimates in three quarters and beat in one with the average negative surprise being 10.08%.
AVROBIO, Inc. Price and EPS Surprise
AVROBIO, Inc. price-eps-surprise | AVROBIO, Inc. Quote
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>