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Big Drug/Biotech Stock Q3 Earnings on Nov 5: REGN, BMY & More

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Several large biotech and drugmakers have already reported their third-quarter results. While Merck, Gilead, Amgen, Biogen & J&J beat estimates for both earnings and sales, Sanofi and Lilly missed on both counts. Others like Pfizer, Novartis and Glaxo beat estimates for earnings while missing the same for sales. Most companies maintained a cautious outlook for the fourth quarter due to rising cases of infections with some retaining or tightening 2020 guidance.

Per the Zacks classification, the pharma/biotech industry comes under the broader Medical sector, which comprises pharma/biotech as well as medical device companies.

Per the Earnings Trends report as of Oct 28, 36.4% of the companies in the Medical sector, constituting nearly 58.6% of the sector’s market capitalization, reported earnings. While 90% beat earnings estimates, 85% beat the same for sales. Earnings increased 8% year over year on 12.1% higher revenues. Overall, third-quarter earnings for the Medical sector are expected to rise 8% on 10.2% sales increase.

Let’s analyze the remaining four drug/biotech companies that are set to report third-quarter 2020 results on Nov 5.

Regeneron Pharmaceuticals (REGN - Free Report)

Regeneron has an impressive track record. It surpassed earnings estimates by 11.05%, on average, in the last four quarters.

Regeneron has an Earnings ESP of +1.24% and a Zacks Rank #3 (Hold), suggesting a likely earnings beat. Our previous article showed that Regeneron did not have the favorable combination to beat on earnings in the soon-to-be-reported quarter. However, estimates changed thereafter and we are more certain of a beat now.

Per our proven model, stocks with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for earnings stands at $7.23 per share.

Investors will be keen to know about sales of Regeneron’s key drug, Eylea, which are likely to have been negatively impacted by the COVID-19 pandemic in the third quarter. Apart from Eylea, investors will be focusing on Dupixent’s (sales are recorded by Sanofi) performance and label expansion, which has been the primary growth driver in the last few quarters.

Bristol-Myers Squibb (BMY - Free Report)

The massive biotech’s earnings beat the Zacks Consensus Estimate in three of the last four quarters with the average surprise being 8.02%.

This #3 Ranked company has an Earnings ESP of +0.44%. The Zacks Consensus Estimate for earnings stands at $1.49 per share per share.

While Eliquis sales are likely to have been strong in the third quarter, Opdivo sales might have recovered from the second-quarter’s decline. Among Celgene’s drugs, Revlimid and Orencia, are likely to have been the key contributors to sales growth. However, overall sales are likely to have been affected by lower demand, resulting from reduced new patient starts and fewer patient visits to physicians during the pandemic.

Zoetis (ZTS - Free Report)

The company surpassed expectations in the trailing four quarters by 13.24%, on average.

Zoetis Inc. Price and EPS Surprise

Zoetis Inc. Price and EPS Surprise

Zoetis Inc. price-eps-surprise | Zoetis Inc. Quote

Zoetis has an Earnings ESP of +3.98% and a Zacks Rank #2, indicating a likely earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for earnings stands at 89 cents per share.

Zoetis’ revenue growth is expected to have been driven largely by companion animal products, especially parasiticides, and its key dermatology portfolio in the third quarter. 

Incyte (INCY - Free Report)

The company has a mixed track record. It missed earnings expectations once in the last four quarters while beating in the other three. The average negative earnings surprise was 893.94%

Incyte Corporation Price and EPS Surprise

Incyte Corporation Price and EPS Surprise

Incyte Corporation price-eps-surprise | Incyte Corporation Quote

Incyte has an Earnings ESP of -0.23% and a Zacks Rank #2.

The Zacks Consensus Estimate for earnings stands at 72 cents per share.

Patient demand for Incyte’s lead drug, Jakafi,a JAK1/JAK2 inhibitor, is likely to have been strong in the third quarter. Meanwhile, Iclusig sales and Olumiant royalties from Eli Lilly are likely to have contributed to the top line.

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