Back to top

Analyst Blog

Regeneron Pharmaceuticals, Inc. (REGN - Analyst Report) is set to report its first quarter 2014 results on Feb 8 before the opening bell. Last quarter it posted a positive 103.96% earnings surprise. Let’s see how things are shaping up for this announcement.

Growth Factors this Quarter

Regeneron’s fourth quarter 2013 earnings breezed past the Zacks Consensus Estimate primarily on the back of strong sales of its eye drug, Eylea. We note that Regeneron has co-developed Eylea with the HealthCare unit of Bayer (BAYRY - Analyst Report). Eylea is expected to continue performing well and drive growth in the first quarter as well. Regeneron also posted positive earnings surprises in all of the last four quarters, with an average beat of 72.67%.

However, a number of negatives are likely to mar the overall results of Regeneron in the first quarter. Results will be affected by higher research and development expenses as Regeneron continues to develop its pipeline. Moreover, selling, general and administrative costs will increase due to costs associated with the marketing of Eylea. In addition to that, Regeneron’s other two marketed drugs, Arcalyst and Zaltrap, are operating in highly competitive markets and will contribute meagrely to first quarter results.

Earnings Whispers?

Our proven model does not conclusively show that Regeneron is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below

Zacks ESP: The Earnings ESP for Regeneron is -13.13% since the Most Accurate Estimate stands at 86 cents, below the Zacks Consensus Estimate of 99 cents.

Zacks Rank #2 (Buy): Regeneron’s Zacks Rank #2 increases the predictive power of ESP. But we need to have a positive ESP to be confident about an earnings beat.

We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Here are some companies you may want to consider as our model shows that they have the right combination of elements, i.e., a positive Zacks Earnings ESP and a Zacks Rank #1, #2 or #3.

Medivation, Inc. (MDVN - Analyst Report) has an earnings ESP of +1,033.33% and holds a Zacks Rank #3 (Hold). Medivation will be reporting first quarter earnings on May 8 after market closes.

Xenoport, Inc. (XNPT - Snapshot Report) has an earnings ESP of +9.09% and holds a Zacks Rank #3. Xenoport will report first quarter earnings on May 8 after market closes.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CENTURY ALU… CENX 22.53 +4.50%
ERBA DIAGNO… ERB 2.91 +4.30%
PLANAR SYST… PLNR 4.31 +3.86%
MALLINCKROD… MNK 72.17 +3.83%
GTT COMMUNI… GTT 12.06 +3.52%