Pfizer Inc. (PFE - Free Report) will be reporting third-quarter 2016 earnings on Nov 1, before market open. Last quarter, the company delivered a positive earnings surprise of 3.23%.
The pharma giant has been consistently beating earnings expectations. The company’s earnings surpassed expectations in each of the last four quarters, with an average positive surprise of 11.16%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
While new products like Eliquis, Xalkori, Xeljanz and Ibrance as well as older products like Lyrica should contribute to the top line meaningfully, the bottom line should be driven by cost savings and share buybacks.
Ibrance has already earned broad patient and physician acceptance with an encouraging feedback while Eliquis continues to perform well due to market penetration and market share gains in the U.S. and Japan.
Meanwhile, the Hospira acquisition should continue to be an important growth driver as well with sterile injectables, biosimilars and infusion system segments performing well. The Anacor acquisition which closed in June should contribute to revenues in the third quarter. We note that Pfizer closed the acquisition of Medivation for approximately $14 billion in Sep 2016.
However, Pfizer will continue to face headwinds in the form of genericization and the expiration of a few co-promotion agreements, which will continue to hamper top-line growth. Moreover, new product launch expenses and R&D investments are expected to hurt profits.
On the third-quarter call, investor focus is expected to remain on the company’s performance along with the performance of new products and pipeline progress including biosimilars and immuno-oncology.
Earnings Whispers
Our proven model does not conclusively show that Pfizer is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Earnings ESP is -1.59% as the Most Accurate estimate stands at 62 cents while the Zacks Consensus Estimate is pegged higher at 63 cents. Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.
Zacks Rank: Pfizer’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks in the healthcare sector that have both a positive Earnings ESP and a favorable Zacks Rank are:
ARIAD Pharmaceuticals Inc. is expected to release results on Nov 1. The company has an Earnings ESP of 5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shire plc with an Earnings ESP of +1.26% and a Zacks Rank #2. The company is scheduled to release results on Nov 1.
Aerie Pharmaceuticals, Inc. , which is slated to report results on Nov 2. The company has an Earnings ESP of +8.57% and a Zacks Rank #3.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Pfizer Inc. (PFE - Free Report) will be reporting third-quarter 2016 earnings on Nov 1, before market open. Last quarter, the company delivered a positive earnings surprise of 3.23%.
The pharma giant has been consistently beating earnings expectations. The company’s earnings surpassed expectations in each of the last four quarters, with an average positive surprise of 11.16%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
While new products like Eliquis, Xalkori, Xeljanz and Ibrance as well as older products like Lyrica should contribute to the top line meaningfully, the bottom line should be driven by cost savings and share buybacks.
Ibrance has already earned broad patient and physician acceptance with an encouraging feedback while Eliquis continues to perform well due to market penetration and market share gains in the U.S. and Japan.
Meanwhile, the Hospira acquisition should continue to be an important growth driver as well with sterile injectables, biosimilars and infusion system segments performing well. The Anacor acquisition which closed in June should contribute to revenues in the third quarter. We note that Pfizer closed the acquisition of Medivation for approximately $14 billion in Sep 2016.
However, Pfizer will continue to face headwinds in the form of genericization and the expiration of a few co-promotion agreements, which will continue to hamper top-line growth. Moreover, new product launch expenses and R&D investments are expected to hurt profits.
On the third-quarter call, investor focus is expected to remain on the company’s performance along with the performance of new products and pipeline progress including biosimilars and immuno-oncology.
Earnings Whispers
Our proven model does not conclusively show that Pfizer is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Earnings ESP is -1.59% as the Most Accurate estimate stands at 62 cents while the Zacks Consensus Estimate is pegged higher at 63 cents. Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.
Zacks Rank: Pfizer’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks in the healthcare sector that have both a positive Earnings ESP and a favorable Zacks Rank are:
ARIAD Pharmaceuticals Inc. is expected to release results on Nov 1. The company has an Earnings ESP of 5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shire plc with an Earnings ESP of +1.26% and a Zacks Rank #2. The company is scheduled to release results on Nov 1.
Aerie Pharmaceuticals, Inc. , which is slated to report results on Nov 2. The company has an Earnings ESP of +8.57% and a Zacks Rank #3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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