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Here's How J&J (JNJ) Will Roll Out Drug Sector Q3 Earnings
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Johnson & Johnson (JNJ - Free Report) will report third-quarter 2020 results on Oct 13, before market open. In the last reported quarter, the company had delivered an earnings surprise of 11.33%.
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. The company has a four-quarter earnings surprise of 7.93%, on average.
J&J’s stock has risen 1.4% this year so far compared with a decrease of 2.3% for the industry.
Factors to Consider
J&J’s Pharma segment is expected to have continued its above-market sales performance despite the negative impact of the COVID-19 pandemic. The sales improvement should have been led by increased penetration and new indications across key products such as Darzalex, Imbruvica, Tremfya, Stelara and Erleada. J&J markets Imbruvica in partnership with AbbVie (ABBV - Free Report) .
However, delayed diagnosis and slower new patient starts due to reduced patient interactions with health care providers amid the COVID-19 pandemic might have hurt sales of some physician-administered drugs in the quarter.
The Zacks Consensus Estimate for Imbruvica, Darzalex and Stelara is pegged at $1.08 billion, $884 million and $1.95 billion, respectively.
Sales of drugs like Zytiga, Remicade, Velcade (internationally) and Procrit/Eprex are likely to have declined due to the impact of generic/biosimilar competition.
The Zacks Consensus Estimate for J&J’s Pharmaceutical segment is $11.25 billion.
With regards to the Medical Devices segment, the pandemic has hit it the hardest due to a widespread decline in elective surgical procedures and redeployment of hospital resources to address patients affected by COVID-19. However, the segment witnessed a less-sharp-than-expected decline in the second quarter. J&J expects the Medical Devices unit to have declined in the range of 10-25% in the third quarter, which is less sharp than the previous expectation of 20-60%. The Zacks Consensus Estimate for the Medical Devices segment is $5.65 billion.
In the Consumer Healthcare segment, higher sales of OTC products like Tylenol and Zyrtec, oral care product Listerine mouthwash, and digestive health products are likely to have been offset by the negative impact of the pandemic on certain categories like skin care and beauty care products.
The Zacks Consensus Estimate for J&J’s Consumer Healthcare segment is $3.51 billion.
Importantly, investors will also focus on whether J&J provides an updated business outlook for 2020 including the impact of coronavirus.
Key Recent Development
Last month, J&J launched a large pivotal phase III study to evaluate the safety and efficacy of a single dose of its investigational COVID-19 vaccine candidate, JNJ-78436735. J&J’s phase III study (ENSEMBLE) will enroll 60,000 adult participants and compare a single vaccine dose of JNJ-78436735 (previously Ad26.COV2.S) to placebo. It aims to enroll participants in Argentina, Brazil, Chile, Colombia, Mexico, Peru, South Africa and the United States at across more than 200 sites. Results of the phase III study are expected by the year end or early next year. The ENSEMBLE study has been initiated in collaboration with BARDA and NIAID.
The company plans to manufacture one billion doses of its vaccine every year and is increasing its manufacturing capacity accordingly. It has also agreed to supply 100 million doses of its coronavirus vaccine to the U.S. government. It expects to file for emergency use authorization of its vaccine candidate in early 2021.
In August. J&J announced a definitive agreement to acquire Momenta Pharmaceuticals for approximately $6.5 billion in an all-cash deal. The acquisition closed last week. With the deal, J&J gained full global rights to Momenta’s pipeline candidate nipocalimab, which is being developed for autoantibody-driven autoimmune diseases like generalized myasthenia gravis, hemolytic diseases of the fetus, and newborn and warm autoimmune hemolytic anemia.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for J&J this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: J&J’s Earnings ESP is 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate stand at $1.98. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: J&J has a Zacks Rank #4.
Stocks to Consider
Here are some large drug stocks that have the right combination of elements to beat on earnings this time around:
Novartis (NVS - Free Report) has an Earnings ESP of +2.84% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Image: Bigstock
Here's How J&J (JNJ) Will Roll Out Drug Sector Q3 Earnings
Johnson & Johnson (JNJ - Free Report) will report third-quarter 2020 results on Oct 13, before market open. In the last reported quarter, the company had delivered an earnings surprise of 11.33%.
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. The company has a four-quarter earnings surprise of 7.93%, on average.
Johnson Johnson Price and EPS Surprise
Johnson Johnson price-eps-surprise | Johnson Johnson Quote
J&J’s stock has risen 1.4% this year so far compared with a decrease of 2.3% for the industry.
Factors to Consider
J&J’s Pharma segment is expected to have continued its above-market sales performance despite the negative impact of the COVID-19 pandemic. The sales improvement should have been led by increased penetration and new indications across key products such as Darzalex, Imbruvica, Tremfya, Stelara and Erleada. J&J markets Imbruvica in partnership with AbbVie (ABBV - Free Report) .
However, delayed diagnosis and slower new patient starts due to reduced patient interactions with health care providers amid the COVID-19 pandemic might have hurt sales of some physician-administered drugs in the quarter.
The Zacks Consensus Estimate for Imbruvica, Darzalex and Stelara is pegged at $1.08 billion, $884 million and $1.95 billion, respectively.
Sales of drugs like Zytiga, Remicade, Velcade (internationally) and Procrit/Eprex are likely to have declined due to the impact of generic/biosimilar competition.
The Zacks Consensus Estimate for J&J’s Pharmaceutical segment is $11.25 billion.
With regards to the Medical Devices segment, the pandemic has hit it the hardest due to a widespread decline in elective surgical procedures and redeployment of hospital resources to address patients affected by COVID-19. However, the segment witnessed a less-sharp-than-expected decline in the second quarter. J&J expects the Medical Devices unit to have declined in the range of 10-25% in the third quarter, which is less sharp than the previous expectation of 20-60%. The Zacks Consensus Estimate for the Medical Devices segment is $5.65 billion.
In the Consumer Healthcare segment, higher sales of OTC products like Tylenol and Zyrtec, oral care product Listerine mouthwash, and digestive health products are likely to have been offset by the negative impact of the pandemic on certain categories like skin care and beauty care products.
The Zacks Consensus Estimate for J&J’s Consumer Healthcare segment is $3.51 billion.
Importantly, investors will also focus on whether J&J provides an updated business outlook for 2020 including the impact of coronavirus.
Key Recent Development
Last month, J&J launched a large pivotal phase III study to evaluate the safety and efficacy of a single dose of its investigational COVID-19 vaccine candidate, JNJ-78436735. J&J’s phase III study (ENSEMBLE) will enroll 60,000 adult participants and compare a single vaccine dose of JNJ-78436735 (previously Ad26.COV2.S) to placebo. It aims to enroll participants in Argentina, Brazil, Chile, Colombia, Mexico, Peru, South Africa and the United States at across more than 200 sites. Results of the phase III study are expected by the year end or early next year. The ENSEMBLE study has been initiated in collaboration with BARDA and NIAID.
The company plans to manufacture one billion doses of its vaccine every year and is increasing its manufacturing capacity accordingly. It has also agreed to supply 100 million doses of its coronavirus vaccine to the U.S. government. It expects to file for emergency use authorization of its vaccine candidate in early 2021.
In August. J&J announced a definitive agreement to acquire Momenta Pharmaceuticals for approximately $6.5 billion in an all-cash deal. The acquisition closed last week. With the deal, J&J gained full global rights to Momenta’s pipeline candidate nipocalimab, which is being developed for autoantibody-driven autoimmune diseases like generalized myasthenia gravis, hemolytic diseases of the fetus, and newborn and warm autoimmune hemolytic anemia.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for J&J this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: J&J’s Earnings ESP is 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate stand at $1.98. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: J&J has a Zacks Rank #4.
Stocks to Consider
Here are some large drug stocks that have the right combination of elements to beat on earnings this time around:
Merck (MRK - Free Report) with an Earnings ESP of +7.40% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Novartis (NVS - Free Report) has an Earnings ESP of +2.84% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>