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Research Daily

Sheraz Mian

Q1 Earnings Scorecard and Fresh Analyst Reports for Bristol-Myers, Medtronic & Altria Group


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Tuesday, April 25, 2023

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features a real-time update on the Q1 earnings season, in addition to new research reports on 16 major stocks, including Bristol-Myers Squibb Company (BMY), Medtronic plc (MDT) and Altria Group, Inc. (MO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Q1 Earnings Season Scorecard

Including the flood of earnings releases before the market's open Tuesday morning (April 25th), we now have Q1 results from 125 S&P 500 members or exactly one-quarter of the index's total membership.

Total Q1 earnings for these companies are down -2.2% from the same period last year on +6.3% higher revenues, with 80% beating EPS estimates and 69.6% beating revenue estimates.

The proportion of these 125 index members beating both EPS and revenue estimates (what we call as the 'blended' beats percentage) is 60%. The 60% 'blended' beats % in Q1 compares to 56% in 2022 Q4 for this group of 125 index members, 55.2% in Q3, 56% in Q2 and 60.8% in 2022 Q1. The average for the preceding 20 quarters (5 years) is 59.6%.

Looking at Q1 as a whole, combining the actuals that have come out with estimates for the still-to-come companies, total earnings are expected to be down -7.7% on +2.5% higher revenues. You can find more details about earnings commentary here >>>>

Today's Featured Analyst Reports

Shares of Bristol-Myers Squibb have declined -3.8% over the past year against the Zacks Medical - Biomedical and Genetics industry’s decline of -4.5%. The company’s product Revlimid, which is one of the top revenue generators, is facing generic competition and sales are being adversely impacted. Earnings estimates for Q1 are down by a cent ahead of the results.

Nevertheless, solid demand for the blood thinner drug Eliquis and the label expansion of Opdivo are maintaining momentum for Bristol-Myers. Eliquis is the leading oral anticoagulant drug and continues to experience growth in its market share. The label expansion of Opdivo into indications for lung cancer, renal cancer and gastric cancer boosted sales.

The recent approval of drugs like Opdualag, Breyanzi and Sotyktu will add a new stream of revenues. According to the Zacks analyst, estimates for BMY’s top line indicate a CAGR of around 1.2% over the next three years, driven by solid demand for legacy drugs and the approval of new drugs.

(You can read the full research report on Bristol-Myers Squibb here >>>)

Medtronic’s shares have gained +6.9% over the past six months against the Zacks Medical - Products industry’s gain of +12.2%. The company is strategically expanding its global presence to address the unmet demand for advanced medical technologies. Within Cardiovascular, Medtronic is gaining market share, banking on product launches.

Within MedSurg, Medtronic is scaling production of Hugo RAS. Innovations and market expansion efforts are helping it offset the impact of the high inflation and supply disruptions. According to the Zacks analyst projection, Medtronic’s 2023 adjusted earnings will dip 4.8% from the year-ago period on 2% revenue growth at CER.

However, in fiscal 2025, adjusted earnings are expected to grow 5% on 2.4% growth in revenues. Medtronic’s strong liquidity position should allow it to meet its near-term debt obligations. All these factors support our bullish stance on the stock.

(You can read the full research report on Medtronic here >>>)

Shares of Altria Group have underperformed the Zacks Tobacco industry over the past year (-7.5% vs. -4.7%). In the fourth quarter of 2022, higher pricing offered respite to revenues across the Smokeable Products and Oral Tobacco categories, which were otherwise hurt by lower volumes.

Incidentally, net revenues fell 2.3% year over year, mainly due to reduced net revenues in the smokeable products unit. In the Smokeable Products segment, net revenues dipped 2.4% due to the reduced shipment volume, which was a result of the industry’s decline rate, retail share losses and calendar differences.

However, the company has been benefiting from its strong pricing power. The management remains optimistic about its journey toward a smoke-free future. To this end, the company’s investment in on! is yielding well.

(You can read the full research report on Altria Group here >>>)

Other noteworthy reports we are featuring today include Target Corporation (TGT), Fiserv, Inc. (FISV) and FedEx Corporation (FDX).

Sheraz Mian

Director of Research

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

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