We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Drug Stocks That Could Be Big Winners this Earnings Season
Read MoreHide Full Article
The first-quarter earnings season is off to a start with results expected to ramp up this week as 177 companies including 61 S&P 500 members provide numbers.
While it is still early in the season, total Q1 earnings are expected to be up 7.6% on revenue growth of 6.3%. This compares to earnings growth of 7.4% and revenue growth of 4.7% in Q416.
With the Q1 earnings season expected to pick pace in the next few days, the market will be focused on seeing if positive surprises, especially on the earnings front, will increase (Read more: Q1 Earnings Season Ramps Up).
Sectors that Should Perform Well in Q1
8 of the 16 Zacks sectors are expected to record positive earnings growth this quarter with Technology and Finance leading the group on the back of expected earnings growth of 11% each, followed by Basic Materials (10.8%).
Will the Medical Sector Continue with its Steady Performance?
The Medical sector is among the few sectors that consistently recorded earnings growth in 2016. However, this sector is expected to record a dip in earnings growth in Q1 -- the sector, which had recorded earnings growth of 4.5% on revenue growth of 5.2% in Q4, is expected to see earnings decline 0.6% in Q1 even though revenues are slated to grow 6.2%.
Historically, the first quarter has usually been a slow one for pharma and biotech companies for reasons like inventory draw down and the Medicare donut hole. Q1 results will also be impacted by currency headwinds. However, even though Q1 could well turn out to be a lackluster quarter for the sector, there are quite a few pharma and biotech stocks that are expected to buck the trend and report a positive earnings surprise in the quarter.
Investing in such stocks could prove beneficial for investors as an earnings beat usually leads to significant share price appreciation.
5 Drug Stocks to Watch Out for This Earnings Season
With the help of the Zacks Stock Screener, we have zeroed-in on five drug stocks that sport a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) and have an Earnings ESP of at least 5%. Earnings ESP is a very valuable tool for investors looking for stocks that are most likely to beat earnings estimates. Moreover, adding a Zacks Rank of #1, 2 or 3 has produced a positive surprise 70% of the time. While you can see the complete list of today’s Zacks #1 Rank stocks here, you can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Galectin Therapeutics Inc. (GALT - Free Report) : Norcross, GA-based Galectin is focused on bringing new therapies for fibrotic disease, severe skin disease and cancer to market. Lead pipeline candidate, GR-MD-02 is being developed for non-alcoholic steatohepatitis (NASH) cirrhosis and has the potential to be developed for additional indications as well. Top-line results from a phase IIb NASH cirrhosis study are expected in Dec 2017.
Galectin has outperformed the Zacks-categorized Medical-Drugs market so far in 2017 with shares shooting up 222.5% compared to the industry gain of 0.7%. Galectin, which delivered a positive surprise of 18.75% in Q4, is expected to deliver a positive earnings surprise of 13.33% in Q1. The Zacks Rank #2 stock is expected to report Q1 results on May 9.
uniQure N.V. (QURE - Free Report) : Gene therapy company, uniQure, is focused on developing transformative therapies for patients suffering from genetic and other devastating diseases like hemophilia, Huntington's disease and cardiovascular diseases. The company’s pipeline comprises gene therapies that have been developed both internally and through partnerships with companies like Bristol Myers-Squibb. uniQure has Breakthrough Therapy Designation for its experimental hemophilia treatment, AMT-060.
The Zacks Rank #2 stock is expected to report Q1 results on May 30. uniQure, which surpassed expectations in two of the last four quarters with an average surprise of 15.69%, has an earnings ESP of 17.39% for Q1.
Pfizer, Inc. (PFE - Free Report) : New York-based pharma giant Pfizer, which has a strong presence in the medicines, consumer healthcare, biosimilars and vaccines segments, is slated to report first quarter 2017 results on May 2. This Zacks Rank #3 stock has an earnings ESP of 7.46% for the first quarter. Over the last 4 quarters, Pfizer has delivered an average earnings surprise of 4.36%. Although the company is facing challenges including generic competition and currency headwinds, new products as well as the Hospira and Medivation acquisitions should drive results. Pfizer has several important pipeline catalysts lined up for 2017 as well.
Zosano Pharma Corporation : Fremont, CA-based Zosano is an emerging central nervous system company focused on providing symptom relief to patients using the company's proprietary intracutaneous delivery system. The company’s lead pipeline candidate, M207, is being developed for migraine. Earlier this year, Zosano had reported positive data on the candidate from a phase II/III study and expects to start a safety study in the second half of the year.
Zosano is a Zacks Rank #3 stock and has an earnings ESP of 43.33% for the first quarter. The company is expected to report results on May 11. Year-to-date (YTD), Zosano has outperformed the Zacks-categorized Medical-Biomedical/Genetics industry with shares soaring 98.7%, well above the industry gain of 2.9%.
BioMarin Pharmaceutical Inc. (BMRN - Free Report) : San Rafael, CA-based BioMarin is focused on the development and commercialization of drugs for serious diseases and medical conditions. The biotech company is well known for its treatments for rare diseases and has five commercialized products in its portfolio. BioMarin has an interesting pipeline as well which addresses diseases like hemophilia, achondroplasia, CLN2 (a late-infantile form of Batten disease) and phenylketonuria (PKU).
BioMarin’s earnings track record is pretty strong with the company having surpassed expectations in each of the last four quarters with an average earnings surprise of 52.16%. BioMarin has an earnings ESP of 9.68% for the first quarter -- the company is expected to report results on Apr 27. YTD, BioMarin has outperformed the Zacks-categorized Medical-Biomedical/Genetics industry with shares gaining 8.5%.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
Image: Bigstock
5 Drug Stocks That Could Be Big Winners this Earnings Season
The first-quarter earnings season is off to a start with results expected to ramp up this week as 177 companies including 61 S&P 500 members provide numbers.
While it is still early in the season, total Q1 earnings are expected to be up 7.6% on revenue growth of 6.3%. This compares to earnings growth of 7.4% and revenue growth of 4.7% in Q416.
With the Q1 earnings season expected to pick pace in the next few days, the market will be focused on seeing if positive surprises, especially on the earnings front, will increase (Read more: Q1 Earnings Season Ramps Up).
Sectors that Should Perform Well in Q1
8 of the 16 Zacks sectors are expected to record positive earnings growth this quarter with Technology and Finance leading the group on the back of expected earnings growth of 11% each, followed by Basic Materials (10.8%).
Will the Medical Sector Continue with its Steady Performance?
The Medical sector is among the few sectors that consistently recorded earnings growth in 2016. However, this sector is expected to record a dip in earnings growth in Q1 -- the sector, which had recorded earnings growth of 4.5% on revenue growth of 5.2% in Q4, is expected to see earnings decline 0.6% in Q1 even though revenues are slated to grow 6.2%.
Historically, the first quarter has usually been a slow one for pharma and biotech companies for reasons like inventory draw down and the Medicare donut hole. Q1 results will also be impacted by currency headwinds. However, even though Q1 could well turn out to be a lackluster quarter for the sector, there are quite a few pharma and biotech stocks that are expected to buck the trend and report a positive earnings surprise in the quarter.
Investing in such stocks could prove beneficial for investors as an earnings beat usually leads to significant share price appreciation.
5 Drug Stocks to Watch Out for This Earnings Season
With the help of the Zacks Stock Screener, we have zeroed-in on five drug stocks that sport a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) and have an Earnings ESP of at least 5%. Earnings ESP is a very valuable tool for investors looking for stocks that are most likely to beat earnings estimates. Moreover, adding a Zacks Rank of #1, 2 or 3 has produced a positive surprise 70% of the time. While you can see the complete list of today’s Zacks #1 Rank stocks here, you can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Galectin Therapeutics Inc. (GALT - Free Report) : Norcross, GA-based Galectin is focused on bringing new therapies for fibrotic disease, severe skin disease and cancer to market. Lead pipeline candidate, GR-MD-02 is being developed for non-alcoholic steatohepatitis (NASH) cirrhosis and has the potential to be developed for additional indications as well. Top-line results from a phase IIb NASH cirrhosis study are expected in Dec 2017.
Galectin has outperformed the Zacks-categorized Medical-Drugs market so far in 2017 with shares shooting up 222.5% compared to the industry gain of 0.7%. Galectin, which delivered a positive surprise of 18.75% in Q4, is expected to deliver a positive earnings surprise of 13.33% in Q1. The Zacks Rank #2 stock is expected to report Q1 results on May 9.
uniQure N.V. (QURE - Free Report) : Gene therapy company, uniQure, is focused on developing transformative therapies for patients suffering from genetic and other devastating diseases like hemophilia, Huntington's disease and cardiovascular diseases. The company’s pipeline comprises gene therapies that have been developed both internally and through partnerships with companies like Bristol Myers-Squibb. uniQure has Breakthrough Therapy Designation for its experimental hemophilia treatment, AMT-060.
The Zacks Rank #2 stock is expected to report Q1 results on May 30. uniQure, which surpassed expectations in two of the last four quarters with an average surprise of 15.69%, has an earnings ESP of 17.39% for Q1.
Pfizer, Inc. (PFE - Free Report) : New York-based pharma giant Pfizer, which has a strong presence in the medicines, consumer healthcare, biosimilars and vaccines segments, is slated to report first quarter 2017 results on May 2. This Zacks Rank #3 stock has an earnings ESP of 7.46% for the first quarter. Over the last 4 quarters, Pfizer has delivered an average earnings surprise of 4.36%. Although the company is facing challenges including generic competition and currency headwinds, new products as well as the Hospira and Medivation acquisitions should drive results. Pfizer has several important pipeline catalysts lined up for 2017 as well.
Zosano Pharma Corporation : Fremont, CA-based Zosano is an emerging central nervous system company focused on providing symptom relief to patients using the company's proprietary intracutaneous delivery system. The company’s lead pipeline candidate, M207, is being developed for migraine. Earlier this year, Zosano had reported positive data on the candidate from a phase II/III study and expects to start a safety study in the second half of the year.
Zosano is a Zacks Rank #3 stock and has an earnings ESP of 43.33% for the first quarter. The company is expected to report results on May 11. Year-to-date (YTD), Zosano has outperformed the Zacks-categorized Medical-Biomedical/Genetics industry with shares soaring 98.7%, well above the industry gain of 2.9%.
BioMarin Pharmaceutical Inc. (BMRN - Free Report) : San Rafael, CA-based BioMarin is focused on the development and commercialization of drugs for serious diseases and medical conditions. The biotech company is well known for its treatments for rare diseases and has five commercialized products in its portfolio. BioMarin has an interesting pipeline as well which addresses diseases like hemophilia, achondroplasia, CLN2 (a late-infantile form of Batten disease) and phenylketonuria (PKU).
BioMarin’s earnings track record is pretty strong with the company having surpassed expectations in each of the last four quarters with an average earnings surprise of 52.16%. BioMarin has an earnings ESP of 9.68% for the first quarter -- the company is expected to report results on Apr 27. YTD, BioMarin has outperformed the Zacks-categorized Medical-Biomedical/Genetics industry with shares gaining 8.5%.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>