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Novartis (NVS) to Report Q4 Earnings: Is a Beat in Store?
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Swiss pharma giant Novartis AG (NVS - Free Report) is scheduled to post fourth-quarter 2023 results on Jan 31.
The company has an impressive track record, beating the earnings expectations in each of the trailing four quarters. It delivered a four-quarter average earnings surprise of 6.99%. In the last reported quarter, it beat earnings estimates by 2.35%.
Let's see how things are shaping up for this announcement.
Factors Driving Growth
With the successful spin-off of the Sandoz business in October 2023, Novartis operates as a single global operating segment, being a focused, innovative medicines company. It is now concentrating on four core therapeutic areas (cardiovascular, renal and metabolic, immunology, neuroscience and oncology).
Sales in the fourth quarter are likely to have been boosted by Kesimpta, Entresto, Kisqali and Pluvicto. The Zacks Consensus Estimate for total sales is $11.7 billion and our estimate for the same is $11.5 billion.
Cardiovascular drug Entresto sales witnessed a solid surge of 31% due to sustained robust demand-led growth benefiting from adopting guideline-directed medical therapy across all geographies in the third quarter. The momentum is likely to have continued in the fourth quarter. The Zacks Consensus Estimate for Entresto and our model estimate are pegged at $1.6 billion.
Robust growth driven by strong demand in the United States is likely to have fueled Pluvicto’s sales in the fourth quarter. Pluvicto is the first and only radioligand therapy approved by the FDA for treating adult patients with progressive, PSMA-positive metastatic castration-resistant prostate cancer. The Zacks Consensus Estimate and our model estimate for Pluvicto stand at $341 million and $333 million, respectively.
The stellar performance of the breast cancer drug Kisqali is expected to have fueled the top line in the fourth quarter. Sales surged in the previous quarter across all regions, based on increasing recognition of its consistently reported overall survival and quality of life benefits in HR+/HER2- advanced breast cancer. The Zacks Consensus Estimate for Kisqali and our model estimate are $604 million and $599 million, respectively.
Other growth drivers, like Kesimpta, is likely to have witnessed increased demand. The Zacks Consensus Estimate for Kesimpta and our model estimate are $612 million and $610 million, respectively.
Sales of Cosentyx are likely to have rebounded in the fourth quarter, as in the third quarter. Sales were under pressure in the previous quarters due to revenue deduction adjustments in the United States, but demand growth across other key regions remained strong.
In October 2023, the FDA approved the drug for treating moderate to severe hidradenitis suppurativa in adults. The FDA also approved intravenous formulation of the drug for the treatment of adults with psoriatic arthritis, ankylosing spondylitis and non-radiographic axial spondyloarthritis. Label expansion of the drug has likely boosted sales. The Zacks Consensus Estimate and our model estimate for Cosentyx is $1.3 billion.
However, generic competition for Gilenya in the United States is likely to have hurt the top line, as in the previous quarter. Generic competition for Gilenya and Lucentis is likely to have impacted sales in Europe as well.
Recent Events
In December 2023, the FDA approved iptacopan as the first oral monotherapy for the treatment of adults with paroxysmal nocturnal hemoglobinuria under the brand name Fabhalta.
Share Price Performance
Shares of Novartis have gained 12.8% in the past three months compared with the industry’s 7.4% growth.
Image Source: Zacks Investment Research
What Our Model Predicts
Our proven model predicts a likely 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 the case here, as elaborated below.
Earnings ESP: Earnings ESP for NVS is +8.22% as the Zacks Consensus Estimate stands at $1.66 while the Most Accurate Estimate is currently pegged at $1.80 per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks to Consider
Here are some other drug/biotech stocks that also have the right combination of elements to beat on earnings this time around:
NVO beat earnings estimates in three of the last four quarters and missed once, the average earnings surprise being 0.58%. Shares of Novo Nordisk have gained 51.7% in the past year.
GSK PLC (GSK - Free Report) has an Earnings ESP of +6.20% and a Zacks Rank #3.
GSK topped earnings estimates in each of the last four quarters and has a four-quarter earnings surprise of 11.02%, on average.
Merck (MRK - Free Report) has an Earnings ESP of +41.75% and a Zacks Rank #3.
Merck topped earnings estimates in each of the last four quarters and has a four-quarter earnings surprise of 5.80%, on average.
Image: Bigstock
Novartis (NVS) to Report Q4 Earnings: Is a Beat in Store?
Swiss pharma giant Novartis AG (NVS - Free Report) is scheduled to post fourth-quarter 2023 results on Jan 31.
The company has an impressive track record, beating the earnings expectations in each of the trailing four quarters. It delivered a four-quarter average earnings surprise of 6.99%. In the last reported quarter, it beat earnings estimates by 2.35%.
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
With the successful spin-off of the Sandoz business in October 2023, Novartis operates as a single global operating segment, being a focused, innovative medicines company. It is now concentrating on four core therapeutic areas (cardiovascular, renal and metabolic, immunology, neuroscience and oncology).
Sales in the fourth quarter are likely to have been boosted by Kesimpta, Entresto, Kisqali and Pluvicto. The Zacks Consensus Estimate for total sales is $11.7 billion and our estimate for the same is $11.5 billion.
Cardiovascular drug Entresto sales witnessed a solid surge of 31% due to sustained robust demand-led growth benefiting from adopting guideline-directed medical therapy across all geographies in the third quarter. The momentum is likely to have continued in the fourth quarter. The Zacks Consensus Estimate for Entresto and our model estimate are pegged at $1.6 billion.
Robust growth driven by strong demand in the United States is likely to have fueled Pluvicto’s sales in the fourth quarter. Pluvicto is the first and only radioligand therapy approved by the FDA for treating adult patients with progressive, PSMA-positive metastatic castration-resistant prostate cancer. The Zacks Consensus Estimate and our model estimate for Pluvicto stand at $341 million and $333 million, respectively.
The stellar performance of the breast cancer drug Kisqali is expected to have fueled the top line in the fourth quarter. Sales surged in the previous quarter across all regions, based on increasing recognition of its consistently reported overall survival and quality of life benefits in HR+/HER2- advanced breast cancer. The Zacks Consensus Estimate for Kisqali and our model estimate are $604 million and $599 million, respectively.
Other growth drivers, like Kesimpta, is likely to have witnessed increased demand. The Zacks Consensus Estimate for Kesimpta and our model estimate are $612 million and $610 million, respectively.
Sales of Cosentyx are likely to have rebounded in the fourth quarter, as in the third quarter. Sales were under pressure in the previous quarters due to revenue deduction adjustments in the United States, but demand growth across other key regions remained strong.
In October 2023, the FDA approved the drug for treating moderate to severe hidradenitis suppurativa in adults. The FDA also approved intravenous formulation of the drug for the treatment of adults with psoriatic arthritis, ankylosing spondylitis and non-radiographic axial spondyloarthritis. Label expansion of the drug has likely boosted sales. The Zacks Consensus Estimate and our model estimate for Cosentyx is $1.3 billion.
However, generic competition for Gilenya in the United States is likely to have hurt the top line, as in the previous quarter. Generic competition for Gilenya and Lucentis is likely to have impacted sales in Europe as well.
Recent Events
In December 2023, the FDA approved iptacopan as the first oral monotherapy for the treatment of adults with paroxysmal nocturnal hemoglobinuria under the brand name Fabhalta.
Share Price Performance
Shares of Novartis have gained 12.8% in the past three months compared with the industry’s 7.4% growth.
Image Source: Zacks Investment Research
What Our Model Predicts
Our proven model predicts a likely 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 the case here, as elaborated below.
Earnings ESP: Earnings ESP for NVS is +8.22% as the Zacks Consensus Estimate stands at $1.66 while the Most Accurate Estimate is currently pegged at $1.80 per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks to Consider
Here are some other drug/biotech stocks that also have the right combination of elements to beat on earnings this time around:
Novo Nordisk (NVO - Free Report) has an Earnings ESP of +0.89% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVO beat earnings estimates in three of the last four quarters and missed once, the average earnings surprise being 0.58%. Shares of Novo Nordisk have gained 51.7% in the past year.
GSK PLC (GSK - Free Report) has an Earnings ESP of +6.20% and a Zacks Rank #3.
GSK topped earnings estimates in each of the last four quarters and has a four-quarter earnings surprise of 11.02%, on average.
Merck (MRK - Free Report) has an Earnings ESP of +41.75% and a Zacks Rank #3.
Merck topped earnings estimates in each of the last four quarters and has a four-quarter earnings surprise of 5.80%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.