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Will J&J (JNJ) Kickstart Pharma Q1 Earnings With a Beat?
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We expect Johnson & Johnson’s (JNJ - Free Report) first-quarter 2021 results, slated on Apr 20, before market open, to beat expectations. In the last reported quarter, the company delivered a positive earnings surprise of 2.76%.
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 9.49%, on average.
J&J’s stock has risen 1.6% this year so far against a decrease of 0.5% for the industry.
Factors to Consider
J&J’s Pharma segment is expected to have continued to outperform the market led by increased penetration and new indications across key products such as Darzalex, Imbruvica, Stelara and Erleada.
The Zacks Consensus Estimate for Imbruvica, Darzalex and Stelara is pegged at $1.2 billion, $1.22 billion and $2.18 billion, respectively.
Meanwhile, other core products like Invega Sustenna, J&J’s pulmonary arterial hypertension (PAH) drugs and new drugs, Erleada and Tremfya might have contributed significantly to sales growth.
Moreover, sales of some other key drugs like Xarelto and Invokana/Invokamet improved in the second half of 2020 after declining in the past few quarters. It remains to be seen if the positive trend continued in the first quarter of 2021. Generic/biosimilar competition to drugs like Zytiga and Remicade and some negative impact of COVID-19 are likely to have hurt the top line.
The Zacks Consensus Estimate for sales in the Pharma unit is pegged at $12.02 billion.
With regards to the Medical Devices segment, the pandemic hit it the hardest due to a widespread decline in elective surgical procedures. Though the segment benefited from better-than-expected market recovery in the second half of 2020, late in the fourth quarter, J&J experienced soft recovery trends and procedure disruptions due to COVID-19 resurgence in countries like the United States and Europe. In the first quarter of 2021, J&J expects moderate procedural disruption to have continued. However, the company expects revenue growth in each quarter of 2021 compared with 2020 due to market recovery. The Zacks Consensus Estimate for sales in the Medical Devices unit is $6.25 billion.
In the Consumer Healthcare segment, higher sales of oral care products are likely to have been offset by the negative impact of the COVID-19 pandemic on certain categories like skin health/beauty. In the first quarter of 2021, sales are expected to have been hurt by negative COVID-related sales comparisons primary in the OTC products category and continued SKU rationalization program. Sales growth is expected to normalize in the second half of 2021 as consumers return to more typical usage patterns for skin and health products. The Zacks Consensus Estimate for sales in the Consumer unit is $3.57 billion.
Importantly, investors will also focus on whether J&J updates its financial outlook for 2021.
In February, the FDA granted Emergency Use Authorization (EUA) to its single-dose COVID-19 vaccine candidate for people aged 18 and older. In March, the European Commission granted Conditional Marketing Authorization (CMA) to the vaccine. However, the vaccine has not yet been rolled out in European countries. Investors will look for updates on initial sales numbers for J&J’s COVID-19 vaccine.
Also, the vaccine is under scrutiny for possible links to very rare cases of blood clots in the brain. On Apr 13, the FDA and U.S. Centers for Disease Control and Prevention (“CDC”) jointly issued a statement to recommend a temporary pause in the use of J&J’s vaccine in the United States as they review six reports of “rare and severe” blood clots in a few individuals who had taken the J&J one-shot COVID-19 vaccine. Investors are expected to ask numerous questions on the issue at the conference call.
Earnings Whispers
Our proven model predicts an earnings beat for J&J in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP: J&J’s Earnings ESP is +3.03% as the Most Accurate Estimate of $2.38 is higher than the Zacks Consensus Estimate of $2.31. 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 #3
Other Stocks to Consider
Here are some other large drug stocks that have the right combination of elements to beat on earnings this time around:
AstraZeneca (AZN - Free Report) has an Earnings ESP of +13.41% and a Zacks Rank #3.
Pfizer (PFE - Free Report) has an Earnings ESP of +1.18% 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 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Bigstock
Will J&J (JNJ) Kickstart Pharma Q1 Earnings With a Beat?
We expect Johnson & Johnson’s (JNJ - Free Report) first-quarter 2021 results, slated on Apr 20, before market open, to beat expectations. In the last reported quarter, the company delivered a positive earnings surprise of 2.76%.
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 9.49%, on average.
Johnson & Johnson Price and EPS Surprise
Johnson & Johnson price-eps-surprise | Johnson & Johnson Quote
J&J’s stock has risen 1.6% this year so far against a decrease of 0.5% for the industry.
Factors to Consider
J&J’s Pharma segment is expected to have continued to outperform the market led by increased penetration and new indications across key products such as Darzalex, Imbruvica, Stelara and Erleada.
The Zacks Consensus Estimate for Imbruvica, Darzalex and Stelara is pegged at $1.2 billion, $1.22 billion and $2.18 billion, respectively.
Meanwhile, other core products like Invega Sustenna, J&J’s pulmonary arterial hypertension (PAH) drugs and new drugs, Erleada and Tremfya might have contributed significantly to sales growth.
Moreover, sales of some other key drugs like Xarelto and Invokana/Invokamet improved in the second half of 2020 after declining in the past few quarters. It remains to be seen if the positive trend continued in the first quarter of 2021. Generic/biosimilar competition to drugs like Zytiga and Remicade and some negative impact of COVID-19 are likely to have hurt the top line.
The Zacks Consensus Estimate for sales in the Pharma unit is pegged at $12.02 billion.
With regards to the Medical Devices segment, the pandemic hit it the hardest due to a widespread decline in elective surgical procedures. Though the segment benefited from better-than-expected market recovery in the second half of 2020, late in the fourth quarter, J&J experienced soft recovery trends and procedure disruptions due to COVID-19 resurgence in countries like the United States and Europe. In the first quarter of 2021, J&J expects moderate procedural disruption to have continued. However, the company expects revenue growth in each quarter of 2021 compared with 2020 due to market recovery. The Zacks Consensus Estimate for sales in the Medical Devices unit is $6.25 billion.
In the Consumer Healthcare segment, higher sales of oral care products are likely to have been offset by the negative impact of the COVID-19 pandemic on certain categories like skin health/beauty. In the first quarter of 2021, sales are expected to have been hurt by negative COVID-related sales comparisons primary in the OTC products category and continued SKU rationalization program. Sales growth is expected to normalize in the second half of 2021 as consumers return to more typical usage patterns for skin and health products. The Zacks Consensus Estimate for sales in the Consumer unit is $3.57 billion.
Importantly, investors will also focus on whether J&J updates its financial outlook for 2021.
In February, the FDA granted Emergency Use Authorization (EUA) to its single-dose COVID-19 vaccine candidate for people aged 18 and older. In March, the European Commission granted Conditional Marketing Authorization (CMA) to the vaccine. However, the vaccine has not yet been rolled out in European countries. Investors will look for updates on initial sales numbers for J&J’s COVID-19 vaccine.
Also, the vaccine is under scrutiny for possible links to very rare cases of blood clots in the brain. On Apr 13, the FDA and U.S. Centers for Disease Control and Prevention (“CDC”) jointly issued a statement to recommend a temporary pause in the use of J&J’s vaccine in the United States as they review six reports of “rare and severe” blood clots in a few individuals who had taken the J&J one-shot COVID-19 vaccine. Investors are expected to ask numerous questions on the issue at the conference call.
Earnings Whispers
Our proven model predicts an earnings beat for J&J in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP: J&J’s Earnings ESP is +3.03% as the Most Accurate Estimate of $2.38 is higher than the Zacks Consensus Estimate of $2.31. 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 #3
Other Stocks to Consider
Here are some other large drug stocks that have the right combination of elements to beat on earnings this time around:
AbbVie (ABBV - Free Report) with an Earnings ESP of +2.54% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
AstraZeneca (AZN - Free Report) has an Earnings ESP of +13.41% and a Zacks Rank #3.
Pfizer (PFE - Free Report) has an Earnings ESP of +1.18% 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 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>