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What's in Store for AstraZeneca (AZN) This Earnings Season?
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AstraZeneca plc (AZN - Free Report) is scheduled to report third-quarter 2020 results on Nov 5.
The company’s earnings beat estimates in three of the past four quarters and missed the same once, with the average earnings surprise being 4.47%.
Shares of AstraZeneca have gained 0.6% so far this year against the industry‘s decrease of 8.5%.
In the last reported quarter, AstraZeneca delivered an earnings surprise of 9.09%.
Factors at Play
Sales of newer medicines, mainly cancer drugs Lynparza, Tagrisso and Imfinzi are expected to have benefited the company’s top line in the third quarter by offsetting lower sales of many other legacy medicines.
Product sales of some drugs in the first half were hurt due to COVID-19 related disruptions, which were more than offset by growth in other drugs. Though demand trends are likely to have improved amid gradual re-opening of global economies, sales will have continued to have been hurt by COVID-19 related disruptions.
Continued underlying demand growth and strong uptake in the first-line setting are likely to have pushed up sales of Tagrisso in the quarter.
Sales of Lynparza, which is marketed in collaboration with Merck (MRK - Free Report) , are likely to have been driven by expanded use in ovarian and breast cancer. In May, the FDA granted approval to Lynparza as a treatment for HRR gene-mutated metastatic castration-resistant prostate cancer. The drug was also approved as first-line treatment for HRD-positive advanced ovarian cancer in the same month. These label expansions are likely to have contributed to the drug’s sales in the third quarter.
Third-quarter sales of Imfinzi are likely to have benefited from strong demand trends in the United States, especially in lung cancer indications.
AstraZeneca’s other major drugs like Fasenra, Brilinta and Farxiga are likely to have contributed to sales growth in the soon-to-be reported quarter.
However, please note that increased competition and formulary plan changes for competitors’ drugs had hurt sales of Farxiga in the United States in the first half. We expect these factors to have hurt sales in the third quarter as well.
Sales of AstraZeneca’s COPD drug Symbicort improved in the first half, following the launch of an authorized generic versionby AstraZeneca’s partner Prasco in the United States. The momentum is likely to have continued in the soon-to-be quarter.
Sales of AstraZeneca’s major legacy drugs have been declining due to rising generic competition. The trend is likely to have continued in the third quarter.
Despite the coronavirus outbreak, the company’s performance was encouraging in the first half, mainly driven by strong growth in newer drugs. With gradual removal of restrictions related to COVID-19 pandemic in economies globally during the third quarter, investors will likely look for signs of an improving outlook for the company on its third-quarter earnings call.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for AstraZeneca in this reporting cycle. 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 as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (41 cents per ADS) and the Zacks Consensus Estimate (49 cents per ADS), is -16.33%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are two biotech stocks that have the right combination of elements to beat on earnings this time around.
Alnylam Pharmaceuticals (ALNY - Free Report) has an Earnings ESP of +4.23% and a Zacks Rank #3.
BioNTech (BNTX - Free Report) has an Earnings ESP of +21.74% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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
What's in Store for AstraZeneca (AZN) This Earnings Season?
AstraZeneca plc (AZN - Free Report) is scheduled to report third-quarter 2020 results on Nov 5.
The company’s earnings beat estimates in three of the past four quarters and missed the same once, with the average earnings surprise being 4.47%.
Shares of AstraZeneca have gained 0.6% so far this year against the industry‘s decrease of 8.5%.
In the last reported quarter, AstraZeneca delivered an earnings surprise of 9.09%.
Factors at Play
Sales of newer medicines, mainly cancer drugs Lynparza, Tagrisso and Imfinzi are expected to have benefited the company’s top line in the third quarter by offsetting lower sales of many other legacy medicines.
Product sales of some drugs in the first half were hurt due to COVID-19 related disruptions, which were more than offset by growth in other drugs. Though demand trends are likely to have improved amid gradual re-opening of global economies, sales will have continued to have been hurt by COVID-19 related disruptions.
Continued underlying demand growth and strong uptake in the first-line setting are likely to have pushed up sales of Tagrisso in the quarter.
Sales of Lynparza, which is marketed in collaboration with Merck (MRK - Free Report) , are likely to have been driven by expanded use in ovarian and breast cancer. In May, the FDA granted approval to Lynparza as a treatment for HRR gene-mutated metastatic castration-resistant prostate cancer. The drug was also approved as first-line treatment for HRD-positive advanced ovarian cancer in the same month. These label expansions are likely to have contributed to the drug’s sales in the third quarter.
Third-quarter sales of Imfinzi are likely to have benefited from strong demand trends in the United States, especially in lung cancer indications.
AstraZeneca’s other major drugs like Fasenra, Brilinta and Farxiga are likely to have contributed to sales growth in the soon-to-be reported quarter.
However, please note that increased competition and formulary plan changes for competitors’ drugs had hurt sales of Farxiga in the United States in the first half. We expect these factors to have hurt sales in the third quarter as well.
Sales of AstraZeneca’s COPD drug Symbicort improved in the first half, following the launch of an authorized generic versionby AstraZeneca’s partner Prasco in the United States. The momentum is likely to have continued in the soon-to-be quarter.
Sales of AstraZeneca’s major legacy drugs have been declining due to rising generic competition. The trend is likely to have continued in the third quarter.
Despite the coronavirus outbreak, the company’s performance was encouraging in the first half, mainly driven by strong growth in newer drugs. With gradual removal of restrictions related to COVID-19 pandemic in economies globally during the third quarter, investors will likely look for signs of an improving outlook for the company on its third-quarter earnings call.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for AstraZeneca in this reporting cycle. 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 as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (41 cents per ADS) and the Zacks Consensus Estimate (49 cents per ADS), is -16.33%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AstraZeneca carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
AstraZeneca PLC Price and Consensus
AstraZeneca PLC price-consensus-chart | AstraZeneca PLC Quote
Stock to Consider
Here are two biotech stocks that have the right combination of elements to beat on earnings this time around.
Alnylam Pharmaceuticals (ALNY - Free Report) has an Earnings ESP of +4.23% and a Zacks Rank #3.
BioNTech (BNTX - Free Report) has an Earnings ESP of +21.74% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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 >>