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J&J (JNJ) to Start Q3 Earnings Season for Pharma Sector
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Johnson & Johnson (JNJ - Free Report) will report third-quarter 2021 results on Oct 19, before market open. In the last reported quarter, the company delivered an earnings surprise of 8.77%.
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 8.55%, on average.
J&J’s stock has risen 2.5% this year so far compared with an increase of 9% for the industry.
Image Source: Zacks Investment Research
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 and Stelara.
The Zacks Consensus Estimate for Imbruvica, Darzalex and Stelara is pegged at $1.14 billion, $1.47 billion and $2.33 billion, respectively.
Other core products like Invega Sustenna, J&J’s PAH drugs and new drugs, Erleada and Tremfya might have contributed significantly to sales growth.
Improvement in sales of some other key drugs like Xarelto seen in the past few quarters is likely to have continued in the third quarter. J&J’s single-dose COVID-19 vaccine, which is approved for emergency use in some countries, generated sales of $164 million in the second quarter. Sales of the vaccine are likely to have been higher in the third quarter.
Generic/biosimilar competition to drugs like Zytiga, Procrit/Eprex and Remicade and some negative impacts of COVID-19 are likely to have hurt the top line.
Also, some volatility in sales mainly due to the recent surge of the Delta variant is expected to have affected sales of some drugs in the third quarter.
Medical Devices segment sales are likely to have benefited from market recovery amid ramping up of medical procedures, better execution and new product launches. It also remains to be seen if sales of some business lines that were slow to recover like Orthopedics and Vision, accelerated in the third quarter, in line with management’s expectations.
In the Consumer Healthcare segment, sales rebounded in the second quarter helped by market recovery from COVID-19 impacts mainly in skin health/beauty products. The positive trend is expected to have continued in the third quarter.
Importantly, investors will also focus on whether J&J updates its financial outlook for 2021.
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 +2.24% as the Zacks Consensus Estimate is $2.37 per share while the Most Accurate Estimate is $2.42 per share. 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 (Sell) currently.
Stocks to Consider
Here are some large drug stocks that have the right combination of elements to beat on earnings this time around:
Image: Bigstock
J&J (JNJ) to Start Q3 Earnings Season for Pharma Sector
Johnson & Johnson (JNJ - Free Report) will report third-quarter 2021 results on Oct 19, before market open. In the last reported quarter, the company delivered an earnings surprise of 8.77%.
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 8.55%, on average.
Johnson & Johnson Price and EPS Surprise
Johnson & Johnson price-eps-surprise | Johnson & Johnson Quote
J&J’s stock has risen 2.5% this year so far compared with an increase of 9% 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 and Stelara.
The Zacks Consensus Estimate for Imbruvica, Darzalex and Stelara is pegged at $1.14 billion, $1.47 billion and $2.33 billion, respectively.
Other core products like Invega Sustenna, J&J’s PAH drugs and new drugs, Erleada and Tremfya might have contributed significantly to sales growth.
Improvement in sales of some other key drugs like Xarelto seen in the past few quarters is likely to have continued in the third quarter. J&J’s single-dose COVID-19 vaccine, which is approved for emergency use in some countries, generated sales of $164 million in the second quarter. Sales of the vaccine are likely to have been higher in the third quarter.
Generic/biosimilar competition to drugs like Zytiga, Procrit/Eprex and Remicade and some negative impacts of COVID-19 are likely to have hurt the top line.
Also, some volatility in sales mainly due to the recent surge of the Delta variant is expected to have affected sales of some drugs in the third quarter.
Medical Devices segment sales are likely to have benefited from market recovery amid ramping up of medical procedures, better execution and new product launches. It also remains to be seen if sales of some business lines that were slow to recover like Orthopedics and Vision, accelerated in the third quarter, in line with management’s expectations.
In the Consumer Healthcare segment, sales rebounded in the second quarter helped by market recovery from COVID-19 impacts mainly in skin health/beauty products. The positive trend is expected to have continued in the third quarter.
Importantly, investors will also focus on whether J&J updates its financial outlook for 2021.
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 +2.24% as the Zacks Consensus Estimate is $2.37 per share while the Most Accurate Estimate is $2.42 per share. 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 (Sell) currently.
Stocks to Consider
Here are some large drug stocks that have the right combination of elements to beat on earnings this time around:
Eli Lilly (LLY - Free Report) with an Earnings ESP of +0.76% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merck (MRK - Free Report) has an Earnings ESP of +2.64% and a Zacks Rank #3.
Pfizer (PFE - Free Report) has an Earnings ESP of +2.20% and a Zacks Rank #2.