We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What's in Store for Novartis (NVS) This Earnings Season?
Read MoreHide Full Article
Swiss pharma giant Novartis AG (NVS - Free Report) is scheduled to report third-quarter 2022 results on Oct 25.
The company has a decent track record, beating earnings expectations thrice in the trailing four quarters and missing in the remaining one. It delivered a four-quarter average earnings surprise of 1.39%. In the last reported quarter, the company beat expectations by 3.31%.
Let's see how things are shaping up for this announcement.
Factors Driving Growth
Novartis operates under two segments — Innovative Medicines and Sandoz (generics).
The Innovative Medicines division recorded 5% growth in the previous quarter on the back of strong performances by Entresto, Kesimpta, Cosentyx, Kisqali and Zolgensma. The momentum is likely to have continued in the third quarter. The Zacks Consensus Estimate for the Innovative Medicine unit is $10.65 billion and our estimate for the same is $10.8 billion.
Psoriasis drug-Cosentyx’s sales increased 12% in the previous quarter led by growth in Europe and the United States and similar growth rates are most likely to have prevailed in the third quarter. The Zacks Consensus Estimate for Cosentyx is $1.3 billion.
Entresto’s sales surged 33% in the second quarter on sustained strong growth with increased patient share across most markets. The drug is most likely to have maintained its stellar performance in the third quarter. The Zacks Consensus Estimate for Entresto is $1.1 billion.
Other growth drivers like Zolgensma (gene therapy for spinal muscular atrophy), Kesimpta and Xolair are also most likely to have maintained momentum for Novartis. Strong performances by Kisqali, Jakavi, Promacta/Revolade and Tafinlar + Mekinist are likely to have boosted sales. However, generic competition, mainly for Afinitor/Votubia, Gleevec/Glivec, Gilenya and Sandostatin, is most likely to have hurt the top line as in the previous quarter.
The Sandoz division revived in the previous quarter after a lull, benefiting from a return to normal business dynamics, with growth across all business franchises. The trend is likely to have continued in the third quarter. The Zacks Consensus Estimate for the Sandoz unit is $2.3 billion.
Novartis recently announced plans to spin off Sandoz into a new publicly traded standalone company to separate this business following a strategic review. This was because industry-wide price competition among generic pharmaceutical companies and consolidation of buyers caused significant declines in sales and profits for Sandoz, particularly in the United States. The spin-off will be completed by the first half of 2023. Further updates on the same are expected along with the earnings release.
In April, NVS announced a new organizational structure to accelerate growth, strengthen its pipeline and increase productivity. The changes are expected to generate SG&A savings of $1.5 billion (the previous target of $1 billion) by 2024. This restructuring is likely to have an impact on the third-quarter bottom line.
Share Price Performance
The stock has lost 12.8% in the year so far compared with the industry's decline of 3.7%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Novartis 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. That is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Novartis is 0.00%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks to Consider
Here are some drug stocks that have the right combination of elements to beat on earnings this time around:
BioMarin beat earnings estimates in each of the last four quarters, with the average earnings surprise being 98.9%.
Bristol Myers (BMY - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #3.
Bristol Myers topped earnings estimates in all the last four quarters. BMY has a four-quarter earnings surprise of 3.65%, on average. Bristol Myers is scheduled to report earnings on Oct 27.
Solid Biosciences (SLDB - Free Report) has an Earnings ESP of +17.14% and a Zacks Rank #2.
Solid Biosciences topped earnings estimates in two of the last four quarters and has a four-quarter earnings surprise of 0.95%, on average.
Image: Bigstock
What's in Store for Novartis (NVS) This Earnings Season?
Swiss pharma giant Novartis AG (NVS - Free Report) is scheduled to report third-quarter 2022 results on Oct 25.
The company has a decent track record, beating earnings expectations thrice in the trailing four quarters and missing in the remaining one. It delivered a four-quarter average earnings surprise of 1.39%. In the last reported quarter, the company beat expectations by 3.31%.
Novartis AG Price, Consensus and EPS Surprise
Novartis AG price-consensus-eps-surprise-chart | Novartis AG Quote
Let's see how things are shaping up for this announcement.
Factors Driving Growth
Novartis operates under two segments — Innovative Medicines and Sandoz (generics).
The Innovative Medicines division recorded 5% growth in the previous quarter on the back of strong performances by Entresto, Kesimpta, Cosentyx, Kisqali and Zolgensma. The momentum is likely to have continued in the third quarter. The Zacks Consensus Estimate for the Innovative Medicine unit is $10.65 billion and our estimate for the same is $10.8 billion.
Psoriasis drug-Cosentyx’s sales increased 12% in the previous quarter led by growth in Europe and the United States and similar growth rates are most likely to have prevailed in the third quarter. The Zacks Consensus Estimate for Cosentyx is $1.3 billion.
Entresto’s sales surged 33% in the second quarter on sustained strong growth with increased patient share across most markets. The drug is most likely to have maintained its stellar performance in the third quarter. The Zacks Consensus Estimate for Entresto is $1.1 billion.
Other growth drivers like Zolgensma (gene therapy for spinal muscular atrophy), Kesimpta and Xolair are also most likely to have maintained momentum for Novartis. Strong performances by Kisqali, Jakavi, Promacta/Revolade and Tafinlar + Mekinist are likely to have boosted sales.
However, generic competition, mainly for Afinitor/Votubia, Gleevec/Glivec, Gilenya and Sandostatin, is most likely to have hurt the top line as in the previous quarter.
The Sandoz division revived in the previous quarter after a lull, benefiting from a return to normal business dynamics, with growth across all business franchises. The trend is likely to have continued in the third quarter. The Zacks Consensus Estimate for the Sandoz unit is $2.3 billion.
Novartis recently announced plans to spin off Sandoz into a new publicly traded standalone company to separate this business following a strategic review. This was because industry-wide price competition among generic pharmaceutical companies and consolidation of buyers caused significant declines in sales and profits for Sandoz, particularly in the United States. The spin-off will be completed by the first half of 2023. Further updates on the same are expected along with the earnings release.
In April, NVS announced a new organizational structure to accelerate growth, strengthen its pipeline and increase productivity. The changes are expected to generate SG&A savings of $1.5 billion (the previous target of $1 billion) by 2024. This restructuring is likely to have an impact on the third-quarter bottom line.
Share Price Performance
The stock has lost 12.8% in the year so far compared with the industry's decline of 3.7%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Novartis 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. That is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Novartis is 0.00%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks to Consider
Here are some drug stocks that have the right combination of elements to beat on earnings this time around:
BioMarin (BMRN - Free Report) has an Earnings ESP of +10.77% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
BioMarin beat earnings estimates in each of the last four quarters, with the average earnings surprise being 98.9%.
Bristol Myers (BMY - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #3.
Bristol Myers topped earnings estimates in all the last four quarters. BMY has a four-quarter earnings surprise of 3.65%, on average. Bristol Myers is scheduled to report earnings on Oct 27.
Solid Biosciences (SLDB - Free Report) has an Earnings ESP of +17.14% and a Zacks Rank #2.
Solid Biosciences topped earnings estimates in two of the last four quarters and has a four-quarter earnings surprise of 0.95%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar