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Pharma Stocks Q1 Earnings Roster for Apr 27: CELG, ABBV, BMY

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Things are certainly looking up as we get into the thick of the Q1 earnings season. By the end of this week, approximately half of the S&P 500 Index would be reporting, making the picture clearer.

As of Apr 21, 95 S&P 500 members, accounting for 24.9% of the index’s total market capitalization has reported results. As per Earnings Preview, total earnings for these companies were up 14.3% year over year on 4.6% higher revenues. Of these, 72.6% beat on earnings estimates while 62.1% beat on revenue estimates resulting in a blended beat of 51.6%.

Most importantly, growth rates are steadily accelerating from the last quarter and on track to record the highest level in the last three years. Estimates for the second quarter are looking up too and if the trend persists it will further boost growth.

How have Drug Stocks Fared So Far?

Sector bellwether Johnson & Johnson (JNJ - Free Report) reported mixed results, beating on earnings but missing on sales. Biogen, Inc. (BIIB - Free Report) reported better-than-expected results as the company surpassed expectations both for earnings and sales.

We note that Medical is one of the sectors expected to record growth in the positive territory. Earnings for the sector are expected to inch up 0.8% on 6.3% improvement in revenues.

As of Apr 21, 9.3% companies in the Medical sector reported results, putting up a blended beat of 80% (the percentage of companies that have beaten both earnings and revenue estimates).

Let’s find out what’s in store for a few companies scheduled to report results on Apr 27.

Celgene Corporation is scheduled to report first-quarter 2017 results, before the opening bell. Celgene’s key product, Revlimid, should continue to act as the main growth driver in the first quarter, driven by share gains in important markets and longer treatment duration in newly diagnosed multiple myeloma (MM). Abraxane should maintain its position in the U.S. with stable market shares in breast, lung and pancreatic cancers. However, Abraxane sales are under pressure due to a highly competitive U.S. market. Celgene’s track record has been pretty decent with the company beating earnings estimates thrice in the trailing four quarters. Overall, the company has delivered an average positive surprise of 5.08%. Celgene currently carries a Zacks Rank #3 (Hold) with an Earnings ESP  of -0.68%. Although Celgene’s Zacks Rank #3 increases the predictive power of ESP, its negative ESP makes it highly unlikely for the stock to beat earnings this quarter. Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. (Read more: Celgene to Post Q1 Earnings: What's in the Cards?)

Celgene Corporation Price and EPS Surprise

 

Celgene Corporation Price and EPS Surprise | Celgene Corporation Quote

AbbVie Inc. (ABBV - Free Report) is slated to release first-quarter 2017 earnings, before the opening bell. The company’s key drug, Humira, is likely to remain the main growth driver in the first quarter. Increasing awareness, favorable clinical data, additional indications and expansion into new markets are expected to help the product to continue to make significant contributions to the top line. We note that AbbVie’s earnings history is a mixed bag as the pharmaceuticals company delivered positive surprises in the two of the last four quarters but recorded in-line earnings in the other two. The average earnings beat for the last four quarters is 1.92%. AbbVie currently carries a Zacks Rank #3 with an Earnings ESP of 0.00%. While the Zacks Rank #3 is favorable, an Earnings ESP of 0.00% makes surprise prediction difficult. (Read more: What's in Store for AbbVie this Earnings Season?)

AbbVie Inc. Price and EPS Surprise

 

AbbVie Inc. Price and EPS Surprise | AbbVie Inc. Quote

Bristol-Myers Squibb Company (BMY - Free Report) is scheduled to report first-quarter 2017 results, before the opening bell. The company's high-profile immuno-oncology drug, Opdivo, should continue to drive the top line in the to-be-reported quarter. Further, recent label expansions into the classical Hodgkin lymphoma and head and neck cancer indications should boost the drug’s sales.  However, the lung-cancer market in the U.S became more competitive in 2016 due to the entry of Tecentriq. Bristol-Myers expects the second-line lung cancer business to be under competitive pressure. As a result, sales of the drug in the U.S is projected be flat in 2017. Bristol-Myers currently carries a Zacks Rank #3 which increases the predictive power of ESP. However, its negative ESP makes it highly unlikely for the stock to beat earnings this quarter. (Read more: Bristol-Myers to Post Q1 Earnings: What's in Store?)

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