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J&J (JNJ) to Begin Q2 Earnings Season for Drug, Biotech Sector
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Johnson & Johnson (JNJ - Free Report) will report second-quarter 2023 results on Jul 20, before market open. In the last reported quarter, the company delivered an earnings surprise of 6.77%.
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 3.96%, on average.
J&J’s stock has declined 10.0% this year so far compared with a decrease of 0.9% for the industry.
Image Source: Zacks Investment Research
Factors to Consider
J&J’s Pharma segment is expected to have contributed to the top line, led by increased penetration and market share gains of key products such as Darzalex and Stelara. Regarding Stelara, while J&J expects Stelara volumes to increase till the loss of exclusivity in late 2023, driven by strong market growth and share gains, the growth might have been hurt by pricing pressure.
The Zacks Consensus Estimate and our model estimates for Stelara are both pegged at $2.71 billion.
The Zacks Consensus Estimate for Darzalex is $2.49 billion, while our model estimate is $2.49 billion.
Other core products like Invega Sustenna and key drugs, Erleada and Tremfya, might have also contributed significantly to sales growth. Importantly, new drugs, Carvykti, a BCMA CAR-T therapy approved for relapsed or refractory multiple myeloma, and Spravato, approved for treatment-resistant depression, are likely to have contributed to top-line growth.
The Zacks Consensus Estimate for Tremfya is $761 million, while our model estimate is $803.7 million.
The Zacks Consensus Estimate for Erleada is $595.0 million, while our model estimate is $594.0 million.
However, lower sales of its key medicine, Imbruvica is likely to have hurt the top line in the second quarter. Rising competitive pressure in the United States from novel oral agents is likely to have hurt sales of key drug, Imbruvica. The Zacks Consensus Estimate for Imbruvica is $824.0 million, while our estimate is $812.0 million.
Generic/biosimilar competition for drugs like Zytiga and Remicade is likely to have hurt the top line.
J&J does not expect any material sales from the COVID-19 vaccine in 2023 beyond what it recorded in the first quarter as its contractual commitments are now over.
The Zacks Consensus Estimate for J&J’s Pharmaceuticals unit is $13.2 billion, while our estimate is $13.04 billion.
With regard to the MedTech segment, sales are expected to have been driven by continued recovery in surgical procedures, better commercial execution and new product launches. J&J expects relatively stable procedure volumes and healthcare staffing levels in 2023, with normal seasonality. However, volume-based procurement issues in China as well as supply constraints might have hurt international sales. The Zacks Consensus Estimate for J&J’s MedTech segment is $7.50 billion, while our model estimate is $7.56 billion.
In May 2023. J&J completed the divesture of its Consumer Health segment into a new publicly-traded company, leaving behind a new J&J with its Pharmaceuticals and MedTech units. This newly listed company, called Kenvue, began trading on the New York Stock Exchange under the ticker symbol “KVUE” with effect from May 4. The company intends to divest its stake in Kenvue in 2023.
J&J expects supply constraints, inflationary pressure and rising input costs to have continued hurting margins in the second quarter of 2023.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for J&J this time around. 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. But that is not the case here.
Earnings ESP: J&J’s Earnings ESP -2.84% as the Zacks Consensus Estimate of $2.61 per share is higher than the Most Accurate Estimate of $2.54 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: J&J has a Zacks Rank #3.
Stocks to Consider
Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
AstraZeneca’s stock has declined 1.1% this year so far. AstraZeneca beat earnings estimates in all the last four quarters. AZN has a four-quarter positive earnings surprise of 8.11%, on average. AstraZeneca is scheduled to release its second-quarter results on Jul 28.
Novo Nordisk (NVO - Free Report) has an Earnings ESP of +4.63% and a Zacks Rank #3.
Novo Nordisk’s stock has risen 18.9% this year so far. Novo Nordisk topped earnings estimates in three of the last four quarters and has a four-quarter earnings surprise of 0.35%, on average. NVO is scheduled to release its second-quarter results on Aug 10.
Moderna (MRNA - Free Report) has an Earnings ESP of +2.83% and a Zacks Rank #3.
Moderna’s stock has declined 31.7% this year so far. The company beat earnings estimates in two of the last four quarters. MRNA has a four-quarter earnings surprise of 21.97%, on average. MRNA is scheduled to release its second-quarter results on Aug 3.
Image: Bigstock
J&J (JNJ) to Begin Q2 Earnings Season for Drug, Biotech Sector
Johnson & Johnson (JNJ - Free Report) will report second-quarter 2023 results on Jul 20, before market open. In the last reported quarter, the company delivered an earnings surprise of 6.77%.
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 3.96%, on average.
Johnson & Johnson Price and EPS Surprise
Johnson & Johnson price-eps-surprise | Johnson & Johnson Quote
J&J’s stock has declined 10.0% this year so far compared with a decrease of 0.9% for the industry.
Image Source: Zacks Investment Research
Factors to Consider
J&J’s Pharma segment is expected to have contributed to the top line, led by increased penetration and market share gains of key products such as Darzalex and Stelara. Regarding Stelara, while J&J expects Stelara volumes to increase till the loss of exclusivity in late 2023, driven by strong market growth and share gains, the growth might have been hurt by pricing pressure.
The Zacks Consensus Estimate and our model estimates for Stelara are both pegged at $2.71 billion.
The Zacks Consensus Estimate for Darzalex is $2.49 billion, while our model estimate is $2.49 billion.
Other core products like Invega Sustenna and key drugs, Erleada and Tremfya, might have also contributed significantly to sales growth. Importantly, new drugs, Carvykti, a BCMA CAR-T therapy approved for relapsed or refractory multiple myeloma, and Spravato, approved for treatment-resistant depression, are likely to have contributed to top-line growth.
The Zacks Consensus Estimate for Tremfya is $761 million, while our model estimate is $803.7 million.
The Zacks Consensus Estimate for Erleada is $595.0 million, while our model estimate is $594.0 million.
However, lower sales of its key medicine, Imbruvica is likely to have hurt the top line in the second quarter. Rising competitive pressure in the United States from novel oral agents is likely to have hurt sales of key drug, Imbruvica. The Zacks Consensus Estimate for Imbruvica is $824.0 million, while our estimate is $812.0 million.
Generic/biosimilar competition for drugs like Zytiga and Remicade is likely to have hurt the top line.
J&J does not expect any material sales from the COVID-19 vaccine in 2023 beyond what it recorded in the first quarter as its contractual commitments are now over.
The Zacks Consensus Estimate for J&J’s Pharmaceuticals unit is $13.2 billion, while our estimate is $13.04 billion.
With regard to the MedTech segment, sales are expected to have been driven by continued recovery in surgical procedures, better commercial execution and new product launches. J&J expects relatively stable procedure volumes and healthcare staffing levels in 2023, with normal seasonality. However, volume-based procurement issues in China as well as supply constraints might have hurt international sales. The Zacks Consensus Estimate for J&J’s MedTech segment is $7.50 billion, while our model estimate is $7.56 billion.
In May 2023. J&J completed the divesture of its Consumer Health segment into a new publicly-traded company, leaving behind a new J&J with its Pharmaceuticals and MedTech units. This newly listed company, called Kenvue, began trading on the New York Stock Exchange under the ticker symbol “KVUE” with effect from May 4. The company intends to divest its stake in Kenvue in 2023.
J&J expects supply constraints, inflationary pressure and rising input costs to have continued hurting margins in the second quarter of 2023.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for J&J this time around. 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. But that is not the case here.
Earnings ESP: J&J’s Earnings ESP -2.84% as the Zacks Consensus Estimate of $2.61 per share is higher than the Most Accurate Estimate of $2.54 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: J&J has a Zacks Rank #3.
Stocks to Consider
Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
AstraZeneca (AZN - Free Report) has an Earnings ESP of +1.88% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
AstraZeneca’s stock has declined 1.1% this year so far. AstraZeneca beat earnings estimates in all the last four quarters. AZN has a four-quarter positive earnings surprise of 8.11%, on average. AstraZeneca is scheduled to release its second-quarter results on Jul 28.
Novo Nordisk (NVO - Free Report) has an Earnings ESP of +4.63% and a Zacks Rank #3.
Novo Nordisk’s stock has risen 18.9% this year so far. Novo Nordisk topped earnings estimates in three of the last four quarters and has a four-quarter earnings surprise of 0.35%, on average. NVO is scheduled to release its second-quarter results on Aug 10.
Moderna (MRNA - Free Report) has an Earnings ESP of +2.83% and a Zacks Rank #3.
Moderna’s stock has declined 31.7% this year so far. The company beat earnings estimates in two of the last four quarters. MRNA has a four-quarter earnings surprise of 21.97%, on average. MRNA is scheduled to release its second-quarter results on Aug 3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.