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Drug Stocks Q1 Earnings to Watch on May 1: PFE, MRK & More
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Per the latest Earnings Preview, the Q1 earnings season which has already crossed the half way mark is gaining strength with earnings and revenue growth on track to reach its highest level in seven years.
Total earnings for the 267 S&P 500 members that have already reported results are up 25.1% from the same period last year on 10% higher revenues, with 76.8% beating top-line estimates and 73.8% beating revenue estimates. The proportion of companies beating both earnings and revenue estimates is 61.4%.
The ongoing earnings season seems to have started off on a solid note for the Drug/Biotech sector. Among the major large cap players that have reported results, Bristol-Myers Squibb (BMY - Free Report) and AbbVie (ABBV - Free Report) beat the Zacks Consensus Estimate for both earnings as well as sales.
Amgen Inc. (AMGN - Free Report) also surpassed both earnings and revenue expectations this quarter.
Higher demand is expected to boost new product sales. Also, innovation and successful product line expansion along with positive clinical study results, FDA approvals, and consistent performance of key products, growing demand for drugs, especially for rare-to-treat diseases, an ageing population as well as an increased healthcare expenditure are some of the factors that are expected keep the sector on a growth trajectory.
Also, according to the Earnings Preview, the broader Medical sector (inclusive of drug, biotech as well as Medical Device companies) is likely to record 7% year-over-year growth in revenues and witness a 12.9% rise in earnings in the quarter under review.
Four pharma/biotech giants are scheduled to report Q1 earnings results on May 1. Let's see, how things are shaping up for the companies in the upcoming releases.
Pfizer Inc. (PFE - Free Report) is slated to releaseresults before the market opens. The company delivered a positive earnings surprise of 10.71% in the last reported quarter. The company’s performance has been impressive in the recent past with its earnings surpassing expectations in the trailing four quarters, with an average beat of 4.97%.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The combination of the company’s Zacks Rank #2 and +1.36 Earnings ESP, makes us reasonably confident of an earnings beat. The Zacks Consensus Estimate for the company’s earnings for the quarter under review is pegged at 74 cents per share.
In the Innovative Health segment, new products like Xeljanz (rheumatoid arthritis) and Ibrance (breast cancer) as well as older products like Lyrica (neuropathic pain), Chantix (smoking cessation) and Eliquis (blood thinner) are expected to drive the top line. In the Essential Health, biosimilars and emerging markets are expected to support sales. The bottom line is expected to be driven by cost savings and share buybacks.(Read More:Will Pfizer's Earnings Beat Estimates Again in Q1?)
Merck and Co. Inc. (MRK - Free Report) is slated to report results before the opening bell. The company delivered a positive earnings surprise of 4.26% in the last reported quarter. The company’s track record is excellent as it has consistently topped estimates in the last four quarters, with an average positive earnings surprise of 8.54%.
Our model does not conclusively show that Merck will beat estimates this quarter. This is because the stockhas an Earnings ESP of 0.00% and a Zacks Rank # 2. The Zacks Consensus Estimate for the quarterly earnings is pegged at 99 cents per share. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merck’s new products like cancer drugs Keytruda and Lynparza and Bridion injection are likely to drive the top line. However, loss of market exclusivity for several drugs, softness in the diabetes (Januvia/Janumet) franchise, and lower sales of key products like Zostavax and Zepatier due to competitive pressure may hurt sales.(Read More:What's in the Cards for Merck This Earnings Season?)
Gilead Sciences, Inc. (GILD - Free Report) is slated to report results after the market closes. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 7.47%.In the last reported quarter, Gilead delivered a positive earnings surprise of 4.71%.
Our model shows that Gilead is likely to beat estimates this quarter. The combination of Gilead’s Zacks Rank of 2 and an Earnings ESP of +0.32% makes us confident about an earnings beat in the upcoming report. The consensus mark for the quarter to be reported is pegged at $1.66 per share.
The company’s Strong HIV performance and other antiviral product sales are being driven by continued uptake of tenofovir alafenamide (“TAF”) based products — Genvoya, Descovy and Odefsey. We expect the trend to continue in the first quarter as well. The franchise received a further boost with the FDA approval of once-daily single tablet regimen (“STR”), Biktarvy (bictegravir 50mg/emtricitabine 200mg/tenofovir alafenamide 25mg, BIC/FTC/TAF) for HIV-1 infection in February 2018. Hence, sales should get a further boost. (Read More:Is a Beat in the Cards for Gilead in Q1 Earnings?)
Incyte Corporation (INCY - Free Report) is slated to report results before the market opens. Incyte’s track record has been impressive so far. The company’s delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 67.05%.In the last reported quarter, Incyte delivered a positive earnings surprise of 103.85%.
Our model shows that Incyte is likely to beat estimates this quarter. The combination of Incyte’s Zacks Rank of 3 and an Earnings ESP of +92.00% makes us confident about an earnings beat in the upcoming report. The consensus mark for the quarter to be reported is pegged at 8 cents per share.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Incyte continues to gain traction by its lead drug Jakafi’s performance. Incyte's Jakafi performance was strong in 2017 driven by patient demand. The sales guidance for 2018 was also impressive. In October 2017, the FDA approved a label update of the drug to include the addition of new patient-reported outcome data from the COMFORT-I study, as well as updating the warning related to progressive multifocal leukoencephalopathy. The pivotal REACH1 trial evaluating Jakafi in patients with steroid-refractory acute graft-versus-host disease has completed enrollment and results are expected in the first half of 2018.
Assuming successful results, Incyte expects to submit an sNDA seeking approval of Jakafi for this indication. Jakafi sales are expected to get a boost from the updated labels. (Read More:Can Jafaki Help Incyte Beat Earnings Estimates in Q1?)
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Drug Stocks Q1 Earnings to Watch on May 1: PFE, MRK & More
Per the latest Earnings Preview, the Q1 earnings season which has already crossed the half way mark is gaining strength with earnings and revenue growth on track to reach its highest level in seven years.
Total earnings for the 267 S&P 500 members that have already reported results are up 25.1% from the same period last year on 10% higher revenues, with 76.8% beating top-line estimates and 73.8% beating revenue estimates. The proportion of companies beating both earnings and revenue estimates is 61.4%.
The ongoing earnings season seems to have started off on a solid note for the Drug/Biotech sector. Among the major large cap players that have reported results, Bristol-Myers Squibb (BMY - Free Report) and AbbVie (ABBV - Free Report) beat the Zacks Consensus Estimate for both earnings as well as sales.
Amgen Inc. (AMGN - Free Report) also surpassed both earnings and revenue expectations this quarter.
Higher demand is expected to boost new product sales. Also, innovation and successful product line expansion along with positive clinical study results, FDA approvals, and consistent performance of key products, growing demand for drugs, especially for rare-to-treat diseases, an ageing population as well as an increased healthcare expenditure are some of the factors that are expected keep the sector on a growth trajectory.
Also, according to the Earnings Preview, the broader Medical sector (inclusive of drug, biotech as well as Medical Device companies) is likely to record 7% year-over-year growth in revenues and witness a 12.9% rise in earnings in the quarter under review.
Four pharma/biotech giants are scheduled to report Q1 earnings results on May 1. Let's see, how things are shaping up for the companies in the upcoming releases.
Pfizer Inc. (PFE - Free Report) is slated to releaseresults before the market opens. The company delivered a positive earnings surprise of 10.71% in the last reported quarter. The company’s performance has been impressive in the recent past with its earnings surpassing expectations in the trailing four quarters, with an average beat of 4.97%.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The combination of the company’s Zacks Rank #2 and +1.36 Earnings ESP, makes us reasonably confident of an earnings beat. The Zacks Consensus Estimate for the company’s earnings for the quarter under review is pegged at 74 cents per share.
In the Innovative Health segment, new products like Xeljanz (rheumatoid arthritis) and Ibrance (breast cancer) as well as older products like Lyrica (neuropathic pain), Chantix (smoking cessation) and Eliquis (blood thinner) are expected to drive the top line. In the Essential Health, biosimilars and emerging markets are expected to support sales. The bottom line is expected to be driven by cost savings and share buybacks.(Read More:Will Pfizer's Earnings Beat Estimates Again in Q1?)
Pfizer Inc. Price and EPS Surprise
Pfizer Inc. Price and EPS Surprise | Pfizer Inc. Quote
Merck and Co. Inc. (MRK - Free Report) is slated to report results before the opening bell. The company delivered a positive earnings surprise of 4.26% in the last reported quarter. The company’s track record is excellent as it has consistently topped estimates in the last four quarters, with an average positive earnings surprise of 8.54%.
Our model does not conclusively show that Merck will beat estimates this quarter. This is because the stockhas an Earnings ESP of 0.00% and a Zacks Rank # 2. The Zacks Consensus Estimate for the quarterly earnings is pegged at 99 cents per share. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merck’s new products like cancer drugs Keytruda and Lynparza and Bridion injection are likely to drive the top line. However, loss of market exclusivity for several drugs, softness in the diabetes (Januvia/Janumet) franchise, and lower sales of key products like Zostavax and Zepatier due to competitive pressure may hurt sales.(Read More:What's in the Cards for Merck This Earnings Season?)
Merck & Co., Inc. Price and EPS Surprise
Merck & Co., Inc. Price and EPS Surprise | Merck & Co., Inc. Quote
Gilead Sciences, Inc. (GILD - Free Report) is slated to report results after the market closes. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 7.47%.In the last reported quarter, Gilead delivered a positive earnings surprise of 4.71%.
Our model shows that Gilead is likely to beat estimates this quarter. The combination of Gilead’s Zacks Rank of 2 and an Earnings ESP of +0.32% makes us confident about an earnings beat in the upcoming report. The consensus mark for the quarter to be reported is pegged at $1.66 per share.
The company’s Strong HIV performance and other antiviral product sales are being driven by continued uptake of tenofovir alafenamide (“TAF”) based products — Genvoya, Descovy and Odefsey. We expect the trend to continue in the first quarter as well. The franchise received a further boost with the FDA approval of once-daily single tablet regimen (“STR”), Biktarvy (bictegravir 50mg/emtricitabine 200mg/tenofovir alafenamide 25mg, BIC/FTC/TAF) for HIV-1 infection in February 2018. Hence, sales should get a further boost. (Read More:Is a Beat in the Cards for Gilead in Q1 Earnings?)
Gilead Sciences, Inc. Price and EPS Surprise
Gilead Sciences, Inc. Price and EPS Surprise | Gilead Sciences, Inc. Quote
Incyte Corporation (INCY - Free Report) is slated to report results before the market opens. Incyte’s track record has been impressive so far. The company’s delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 67.05%.In the last reported quarter, Incyte delivered a positive earnings surprise of 103.85%.
Our model shows that Incyte is likely to beat estimates this quarter. The combination of Incyte’s Zacks Rank of 3 and an Earnings ESP of +92.00% makes us confident about an earnings beat in the upcoming report. The consensus mark for the quarter to be reported is pegged at 8 cents per share.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Incyte continues to gain traction by its lead drug Jakafi’s performance. Incyte's Jakafi performance was strong in 2017 driven by patient demand. The sales guidance for 2018 was also impressive. In October 2017, the FDA approved a label update of the drug to include the addition of new patient-reported outcome data from the COMFORT-I study, as well as updating the warning related to progressive multifocal leukoencephalopathy. The pivotal REACH1 trial evaluating Jakafi in patients with steroid-refractory acute graft-versus-host disease has completed enrollment and results are expected in the first half of 2018.
Assuming successful results, Incyte expects to submit an sNDA seeking approval of Jakafi for this indication. Jakafi sales are expected to get a boost from the updated labels. (Read More:Can Jafaki Help Incyte Beat Earnings Estimates in Q1?)
Incyte Corporation Price and EPS Surprise
Incyte Corporation Price and EPS Surprise | Incyte Corporation Quote
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>