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J&J (JNJ) to Begin Pharma Q1 Earnings Season: What's in Store?
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We expect Johnson & Johnson (JNJ - Free Report) to beat expectations when it reports first-quarter 2024 results on Apr 16, before market open. In the last reported quarter, the company delivered an earnings surprise of 0.88%.
Factors to Consider
Sales in J&J’s Innovative Medicines segment (previously the Pharmaceutical segment) are expected to have been driven by higher sales of key products such as Darzalex, Stelara, Tremfya and Erleada due to strong market growth and demand trends.
The Zacks Consensus Estimate for Stelara is $2.59 billion, while our model estimate is $2.49 billion.
The Zacks Consensus Estimate for Darzalex is $2.66 billion, while our model estimate is $2.63 billion.
The Zacks Consensus Estimate for Tremfya is $795 million, while our model estimate is $761.6 million.
The Zacks Consensus Estimate for Erleada is $662.0 million, while our model estimate is $661.5 million.
Other products like Invega Sustenna and Uptravi are likely to have witnessed growth. Importantly, new drugs, Carvykti, a BCMA CAR-T therapy approved for relapsed or refractory multiple myeloma, and Spravato, approved for treatment-resistant depression, are likely to have contributed to top-line growth. J&J expects to begin disclosing sales from the new cancer drug, Tecvayli, from the first quarter of 2024, which was until now included in Other Oncology
However, lower sales of its key medicine, Imbruvica, and its COVID-19 vaccine are likely to have hurt the top line in the first quarter. Rising competitive pressure in the United States from novel oral agents is likely to have hurt sales of Imbruvica. The Zacks Consensus Estimate for Imbruvica is $712.0 million, while our estimate is $699.8 million.
Generic/biosimilar competition for drugs like Zytiga and Remicade is likely to have hurt the top line.
Overall, Innovative Medicine sales growth is expected to be slightly stronger in the first half of the year compared to the second half due to the potential entry of Stelara biosimilars in Europe in mid-2024.
The Zacks Consensus Estimate for J&J’s Innovative Medicine unit is $13.44 billion, while our estimate is $13.24 billion.
In the MedTech segment, J&J expects a strong recovery in worldwide procedure volumes and uptake from recently launched products to continue to drive sales in the first quarter. However, the impact of the volume-based procurement issues in China in some categories and a modest impact from international sanctions in Russia might have hurt sales to some extent.
The Zacks Consensus Estimate, as well as our model estimate for J&J’s MedTech segment, is $7.93 billion.
Earnings Surprise History
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 5.12%, on average.
J&J’s stock has declined 10.4% in the past year against an increase of 15.9% for the industry.
Image Source: Zacks Investment Research
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 +1.95% as the Most Accurate Estimate is $2.69 per share while the Zacks Consensus Estimate is pegged at $2.64 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 #3 currently.
Other Stocks to Consider
Here are some large drug/biotech stocks that also have the right combination of elements to beat on earnings this time around:
Fate Therapeutics (FATE - Free Report) has an Earnings ESP of +5.99% and a Zacks Rank #3.
Fate Therapeutics’ stock has risen 6% in the past year. Fate Therapeutics topped earnings estimates in each of the last four quarters. FATE has a four-quarter earnings surprise of 28.86%, on average.
Prothena’s stock has declined 52.7% in the past year. Prothena beat earnings estimates in one of the last four quarters while missing in the other three. PRTA has a four-quarter earnings surprise of 56.13%, on average.
Novavax (NVAX - Free Report) has an Earnings ESP of +7.60% and a Zacks Rank #3.
Novavax’s stock has declined 52.4% in the past year. Novavax beat earnings estimates in two of the last four quarters while missing in the other two. NVAX has a four-quarter negative earnings surprise of 4.31%, on average.
Image: Bigstock
J&J (JNJ) to Begin Pharma Q1 Earnings Season: What's in Store?
We expect Johnson & Johnson (JNJ - Free Report) to beat expectations when it reports first-quarter 2024 results on Apr 16, before market open. In the last reported quarter, the company delivered an earnings surprise of 0.88%.
Factors to Consider
Sales in J&J’s Innovative Medicines segment (previously the Pharmaceutical segment) are expected to have been driven by higher sales of key products such as Darzalex, Stelara, Tremfya and Erleada due to strong market growth and demand trends.
The Zacks Consensus Estimate for Stelara is $2.59 billion, while our model estimate is $2.49 billion.
The Zacks Consensus Estimate for Darzalex is $2.66 billion, while our model estimate is $2.63 billion.
The Zacks Consensus Estimate for Tremfya is $795 million, while our model estimate is $761.6 million.
The Zacks Consensus Estimate for Erleada is $662.0 million, while our model estimate is $661.5 million.
Other products like Invega Sustenna and Uptravi are likely to have witnessed growth. Importantly, new drugs, Carvykti, a BCMA CAR-T therapy approved for relapsed or refractory multiple myeloma, and Spravato, approved for treatment-resistant depression, are likely to have contributed to top-line growth. J&J expects to begin disclosing sales from the new cancer drug, Tecvayli, from the first quarter of 2024, which was until now included in Other Oncology
However, lower sales of its key medicine, Imbruvica, and its COVID-19 vaccine are likely to have hurt the top line in the first quarter. Rising competitive pressure in the United States from novel oral agents is likely to have hurt sales of Imbruvica. The Zacks Consensus Estimate for Imbruvica is $712.0 million, while our estimate is $699.8 million.
Generic/biosimilar competition for drugs like Zytiga and Remicade is likely to have hurt the top line.
Overall, Innovative Medicine sales growth is expected to be slightly stronger in the first half of the year compared to the second half due to the potential entry of Stelara biosimilars in Europe in mid-2024.
The Zacks Consensus Estimate for J&J’s Innovative Medicine unit is $13.44 billion, while our estimate is $13.24 billion.
In the MedTech segment, J&J expects a strong recovery in worldwide procedure volumes and uptake from recently launched products to continue to drive sales in the first quarter. However, the impact of the volume-based procurement issues in China in some categories and a modest impact from international sanctions in Russia might have hurt sales to some extent.
The Zacks Consensus Estimate, as well as our model estimate for J&J’s MedTech segment, is $7.93 billion.
Earnings Surprise History
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 5.12%, on average.
Johnson & Johnson Price and EPS Surprise
Johnson & Johnson price-eps-surprise | Johnson & Johnson Quote
J&J’s stock has declined 10.4% in the past year against an increase of 15.9% for the industry.
Image Source: Zacks Investment Research
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 +1.95% as the Most Accurate Estimate is $2.69 per share while the Zacks Consensus Estimate is pegged at $2.64 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 #3 currently.
Other Stocks to Consider
Here are some large drug/biotech stocks that also have the right combination of elements to beat on earnings this time around:
Fate Therapeutics (FATE - Free Report) has an Earnings ESP of +5.99% and a Zacks Rank #3.
Fate Therapeutics’ stock has risen 6% in the past year. Fate Therapeutics topped earnings estimates in each of the last four quarters. FATE has a four-quarter earnings surprise of 28.86%, on average.
Prothena (PRTA - Free Report) has an Earnings ESP of +7.05% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Prothena’s stock has declined 52.7% in the past year. Prothena beat earnings estimates in one of the last four quarters while missing in the other three. PRTA has a four-quarter earnings surprise of 56.13%, on average.
Novavax (NVAX - Free Report) has an Earnings ESP of +7.60% and a Zacks Rank #3.
Novavax’s stock has declined 52.4% in the past year. Novavax beat earnings estimates in two of the last four quarters while missing in the other two. NVAX has a four-quarter negative earnings surprise of 4.31%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.