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.
The second-quarter earnings season is off to a strong start, propelled by overall growth in both revenues and earnings. In particular, the proportion of companies beating on revenue estimates so far is way above any other recent quarter. Currently, the blended Q2 earnings growth (both reported and unreported) is +21%, which is below 26% recorded in the earlier quarter, but the momentum is expected to pick up as the season progresses with as many as 750 companies (including 175 S&P 500 members) that are expected to report in the current week.
As of Jul 20, 87 companies (accounting for a quarter of the total market capitalization of the index) from the S&P 500 index reported results. Per the latest Earnings Preview, earnings for these 87 companies up 20.9% year over year on the back of a 10.3% growth in revenues. Among these, 86.2% of the companies beat on earnings, while 77% surpassed revenues.
How Has the Medical Sector Fared So Far?
The Medical sector (includes drug, biotech as well as Medical Device companies) is expected to record a 9.1% earnings growth on the back of 6.4% revenue growth in the second quarter.
Last week, two pharma giants reported second-quarter results. While the sector’s bellwether Johnson & Johnson (JNJ - Free Report) beat on both revenues and earnings, results for the Swiss pharma giant Novartis AG (NVS - Free Report) were a mixed bag with earnings missing estimates but revenues beating on the same.
The ongoing week will see quite a few bigwigs report results from the volatile biotech sector as well. Here we have three pharma/biotech companies, which are scheduled to release their second-quarter earnings on Jul 25. Let's see how things are shaping up for these announcements.
What’s in Store for GILD, VRTX and GSK?
Gilead Sciences Inc. (GILD - Free Report) has a decent track record, with the company’s earnings beating estimates in three of the last four quarters. In the last reported quarter, the company’s earnings missed expectations by 10.8%. Overall, the company delivered an average positive earnings surprise of 4.98%.
Our proven model provides some idea about the stocks that are about to release their earnings results. Per our model, a stock needs a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Gilead currently carries a Zacks Rank #2, which when combined with an ESP of +0.15% makes us reasonably confident of an earnings beat this quarter. Strong performance from the HIV franchise is likely to offset the persistent decline from the HCV franchise. Strong HIV performance and other antiviral product sales are being driven by continued uptake of tenofovir alafenamide (“TAF”) based products — Genvoya, Descovy and Odefsey. We expect the trend to continue in the second quarter as well. The company also received a major boost with the approval of its once-daily single tablet regimen (“STR”), Biktarvy (bictegravir 50mg/emtricitabine 200mg/tenofovir alafenamide 25mg, BIC/FTC/TAF) for HIV-1 infection in both the United States and Europe. You can see the complete list of today’s Zacks #1 Rank stocks here.
Vertex Pharmaceuticals, Inc. (VRTX - Free Report) track record has been impressive so far. The company delivered positive earnings surprise in each of the last four quarters. The company’s average positive earnings surprise for the last four quarters is 22.72%. In the last reported quarter, Vertex came up with a positive surprise of 31.03%.
The company currently carries a Zacks Rank #3 and an ESP of +5.95%, which makes us reasonably confident of an earnings beat this quarter. Vertex Pharma’s solid cystic fibrosis ("CF") drug portfolio should keep up the momentum for the company. Strong demand for Kalydeco, label expansion of Orkambi and approval of Symdeko should contribute to the growth. In particular, Kalydeco is approved for a wide range of CF patients aged 2 years and older, with certain residual mutations in CFTR gene. The drug has seen significant demand in the eligible patient population, which is expected to persist. Investors’ focus on the call will be based on the progress of these triple combination CF regimens, which are crucial for long-term growth of Vertex Pharma.
GlaxoSmithKline plc (GSK - Free Report) has a decent track record as well. The company beat estimates in three of the trailing four quarters. However, in the last quarter, the company missed estimates by 2.86%. Overall, the company came up with an average beat of 1.41%.
Glaxo carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s -5.19% ESP makes surprise prediction difficult.
Performance of Glaxo’s new products has been encouraging. Nucala (severe eosinophilic asthma), the inhaled Ellipta portfolio (chronic obstructive pulmonary disorder/COPD and asthma), Tivicay and Triumeq (HIV) and Menveo, Bexsero (meningitis vaccines) are all doing well. The recent approvals of Trelegy Ellipta, Shingrix and Juluca have boosted the company’s portfolio. However, pricing pressure and competitive dynamics are hurting sales in Glaxo’s inhaled respiratory products, particularly the older ones.
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 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
Pharma/Biotech Stock Q2 Earnings on Jul 25: GILD, VRTX & GSK
The second-quarter earnings season is off to a strong start, propelled by overall growth in both revenues and earnings. In particular, the proportion of companies beating on revenue estimates so far is way above any other recent quarter. Currently, the blended Q2 earnings growth (both reported and unreported) is +21%, which is below 26% recorded in the earlier quarter, but the momentum is expected to pick up as the season progresses with as many as 750 companies (including 175 S&P 500 members) that are expected to report in the current week.
As of Jul 20, 87 companies (accounting for a quarter of the total market capitalization of the index) from the S&P 500 index reported results. Per the latest Earnings Preview, earnings for these 87 companies up 20.9% year over year on the back of a 10.3% growth in revenues. Among these, 86.2% of the companies beat on earnings, while 77% surpassed revenues.
How Has the Medical Sector Fared So Far?
The Medical sector (includes drug, biotech as well as Medical Device companies) is expected to record a 9.1% earnings growth on the back of 6.4% revenue growth in the second quarter.
Last week, two pharma giants reported second-quarter results. While the sector’s bellwether Johnson & Johnson (JNJ - Free Report) beat on both revenues and earnings, results for the Swiss pharma giant Novartis AG (NVS - Free Report) were a mixed bag with earnings missing estimates but revenues beating on the same.
The ongoing week will see quite a few bigwigs report results from the volatile biotech sector as well. Here we have three pharma/biotech companies, which are scheduled to release their second-quarter earnings on Jul 25. Let's see how things are shaping up for these announcements.
What’s in Store for GILD, VRTX and GSK?
Gilead Sciences Inc. (GILD - Free Report) has a decent track record, with the company’s earnings beating estimates in three of the last four quarters. In the last reported quarter, the company’s earnings missed expectations by 10.8%. Overall, the company delivered an average positive earnings surprise of 4.98%.
Our proven model provides some idea about the stocks that are about to release their earnings results. Per our model, a stock needs a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Gilead currently carries a Zacks Rank #2, which when combined with an ESP of +0.15% makes us reasonably confident of an earnings beat this quarter. Strong performance from the HIV franchise is likely to offset the persistent decline from the HCV franchise. Strong HIV performance and other antiviral product sales are being driven by continued uptake of tenofovir alafenamide (“TAF”) based products — Genvoya, Descovy and Odefsey. We expect the trend to continue in the second quarter as well. The company also received a major boost with the approval of its once-daily single tablet regimen (“STR”), Biktarvy (bictegravir 50mg/emtricitabine 200mg/tenofovir alafenamide 25mg, BIC/FTC/TAF) for HIV-1 infection in both the United States and Europe. You can see the complete list of today’s Zacks #1 Rank stocks here.
(Read more: Will HIV Sales Drive Gilead to Beat in Q2 Earnings?)
Gilead Sciences, Inc. Price, Consensus and EPS Surprise
Gilead Sciences, Inc. Price, Consensus and EPS Surprise | Gilead Sciences, Inc. Quote
Vertex Pharmaceuticals, Inc. (VRTX - Free Report) track record has been impressive so far. The company delivered positive earnings surprise in each of the last four quarters. The company’s average positive earnings surprise for the last four quarters is 22.72%. In the last reported quarter, Vertex came up with a positive surprise of 31.03%.
The company currently carries a Zacks Rank #3 and an ESP of +5.95%, which makes us reasonably confident of an earnings beat this quarter. Vertex Pharma’s solid cystic fibrosis ("CF") drug portfolio should keep up the momentum for the company. Strong demand for Kalydeco, label expansion of Orkambi and approval of Symdeko should contribute to the growth. In particular, Kalydeco is approved for a wide range of CF patients aged 2 years and older, with certain residual mutations in CFTR gene. The drug has seen significant demand in the eligible patient population, which is expected to persist. Investors’ focus on the call will be based on the progress of these triple combination CF regimens, which are crucial for long-term growth of Vertex Pharma.
(Read more: Is a Beat in Store for Vertex This Earnings Season?)
Vertex Pharmaceuticals Incorporated Price, Consensus and EPS Surprise
Vertex Pharmaceuticals Incorporated Price, Consensus and EPS Surprise | Vertex Pharmaceuticals Incorporated Quote
GlaxoSmithKline plc (GSK - Free Report) has a decent track record as well. The company beat estimates in three of the trailing four quarters. However, in the last quarter, the company missed estimates by 2.86%. Overall, the company came up with an average beat of 1.41%.
Glaxo carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s -5.19% ESP makes surprise prediction difficult.
Performance of Glaxo’s new products has been encouraging. Nucala (severe eosinophilic asthma), the inhaled Ellipta portfolio (chronic obstructive pulmonary disorder/COPD and asthma), Tivicay and Triumeq (HIV) and Menveo, Bexsero (meningitis vaccines) are all doing well. The recent approvals of Trelegy Ellipta, Shingrix and Juluca have boosted the company’s portfolio. However, pricing pressure and competitive dynamics are hurting sales in Glaxo’s inhaled respiratory products, particularly the older ones.
(Read more: What's in the Cards for Glaxo (GSK - Free Report) This Earnings Season?)
GlaxoSmithKline plc Price, Consensus and EPS Surprise
GlaxoSmithKline plc Price, Consensus and EPS Surprise | GlaxoSmithKline plc Quote
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 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 >>