For Immediate Release
Chicago, IL – April 8, 2022 – Today, Zacks Investment Ideas feature highlights Regeneron Pharmaceuticals, Inc. (
REGN Quick Quote REGN - Free Report) , andBristol-Myers Squibb Co. ( BMY Quick Quote BMY - Free Report) . BioPharma Giants Print Fresh All-Time Highs
Investors may be wary of buying a stock that is hitting new all-time highs, but history has shown us that this is a sign of strength and higher highs are likely ahead. The trend is our friend in this market, and the two biopharmaceutical stocks we will delve into below are trending exceptionally well.
As investors we want to be in leading stocks. The problem for most investors is that they fail to notice the relevant signs and distinctions from the leaders. They are too busy holding on to former losers hoping to break even, and refuse to recognize the 'buy' signals that leading stocks are demonstrating under the surface. These investors often pay too much attention to the financial news media, who are usually wrong and don't normally invest in the stocks they tout on TV.
The best investors exhibit great discipline and employ a method that has a history of outperformance. They are extremely patient and wait for proper entry points. They know what to look for in terms of price patterns, sector rotation, and relative strength. These investors have built a process that enables them to identify leading stocks at any given point in time.
Here at Zacks we give you the tools to help identify these leading stocks and outperform the market. Our Zacks Industry Rank identifies the top industry groups that contain market leaders, providing a tailwind to your investing success. Our Zacks Rank methodology pinpoints stocks that are witnessing positive earnings estimate revision activity, allowing investors to jump on board
before an emerging rally gets underway. And our Earnings ESP filter empowers investors by allowing them the opportunity to detect stocks that are most likely to beat consensus estimates.
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Let's discuss two biopharmaceutical stocks that are displaying recent relative strength and are trending well this year. These stocks have led the major indexes and are showing signs of continued outperformance.
Regeneron Pharmaceuticals, Inc.
Regeneron Pharmaceuticals is a biopharmaceutical company that invents, develops, manufactures and commercializes therapeutic medicines for the treatment of severe medical conditions. REGN has developed therapeutic candidates for the potential treatment of obesity, rheumatoid arthritis, cancer, and asthma. Founded in 1988 and headquartered in Tarrytown, NY, REGN has established collaboration and license agreements with companies such as Sanofi, Bayer, Roche Pharmaceuticals, as well as an agreement with the U.S. Department of Health and Human Services.
REGN's key growth driver is Eylea, its treatment for neovascular age-related macular degeneration as well as diabetic macular edema. Growth in the U.S. markets is being driven by demographic trends with an aging population and an overall increase in the prevalence of diabetes. REGN has seen an incremental contribution from its REGEN-COV virus treatment which has boosted revenues significantly. We expect sales to continue their recent trend as the pandemic lingers on.
Trading at an undervalued 15.99 forward P/E relative to its industry (23.75), Regeneron has surpassed earnings estimates in each of the past five quarters. The company has delivered a trailing four-quarter average earnings surprise of +32.36%. REGN most recently announced Q4 EPS back in February of $23.72, a +28.29% surprise over estimates. The stock has risen in tune with these earnings beats, advancing nearly 50% in the past year.
What the Zacks Model Unveils
The Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. This more recent information can be a better predictor of the future, which can give investors a leg up during earnings season. The technique has proven to be quite useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time.
REGN currently has a Zacks #3 Hold ranking and an Earnings ESP of +11.82%. The recent trend of earnings beats looks set to continue. The Zacks Consensus Estimate for Q1 EPS stands at $9.78, which would represent a slight -1.11% decline versus the same quarter last year. Sales are expected to climb 18% to $2.98 billion. REGN is due to report the quarterly earnings on May 4
th. Bristol-Myers Squibb Co.
Bristol-Myers Squibb discovers, develops, licenses, and manufactures biopharmaceutical products worldwide. Its products target hematology, oncology, cardiovascular issues, immunology, as well as COVID-19. BMY sells these products to wholesalers, distributors, pharmacies, hospitals, clinics, and government agencies. Bristol-Myers Squibb was founded in 1887 and is based in New York, NY.
BMY has strung together a notable track record in terms of earnings beats, missing estimates just one time in the past four years. BMY has posted an average +1.01% earnings beat over the past four quarters. The biopharmaceutical company is also relatively undervalued, trading at just a 9.67 forward P/E. The stock is up 25% this year and thus far has proven to be one of 2022's best performers.
Analysts are expecting growth to continue in the first quarter of this year. The Q1 Zacks Consensus EPS Estimate is currently $1.93, translating to growth of 10.92% relative to the same quarter a year ago. Sales are seen climbing 2.28% to $11.33 billion.
Make sure to put REGN and BMY on your watchlist if you haven't already done so.
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