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Is a Beat in Store for Glaxo (GSK) This Earnings Season?
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We expect GlaxoSmithKline plc (GSK - Free Report) to beat expectations when it reports third-quarter 2019 results on Oct 30. In the last reported quarter, the company delivered a positive surprise of 21.88%.
Shares of Glaxo have outperformed the industry so far this year. The stock has returned 11.3% against the industry’s decrease of 0.3%.
Glaxo’s earnings performance has been mixed so far. The company’s earnings surpassed estimates in three of the trailing four quarters and missed the same once with the average beat being 12.74%.
Factors to Consider
Strong demand for its shingles vaccine Shingrix and respiratory drugs is likely to drive sales of Glaxo’s Pharmaceuticals segment. However, rising competition in the HIV segment, especially for three-drug regimens, might have hurt sales.
Growth trend in sales of Respiratory category is likely to have continued in the third quarter on the back of strong demand for Trelegy Ellipta and Nucala. Launch of self-administration option for Nucala in June might have boosted the drug’s sales this quarter. However, older respiratory drugs including Advair and Relvar/Breo Ellipta facing competitive and pricing pressure are likely to have unfavorably impacted Glaxo’s sales in the soon-to-be reported quarter.
The Vaccines segment is likely to have benefited from sustained uptake of Shingrix. Approval of the vaccine in China in May is likely to have further boosted the sales this quarter. Moreover, meningitis vaccines Bexsero and Menveo, acquired from Novartis AG (NVS - Free Report) , registered a recovery in sales growth in the past couple of quarters. The growth trend is likely to have sustained in the third quarter. However, demand for these vaccines fluctuates every season and therefore sales may vary.
Glaxo’s immuno-inflammation drugs like Benlysta are expected to have recorded growth in the third quarter. Oncology sales, solely from Zejula, are likely to have remained on the growth path.
Meanwhile, competitive environment and the shift in the portfolio toward two-drug regimens are likely to have hurt sales of three-drug regimens — Tivicay and Triumeq — and older HIV drugs. However, strong growth trend witnessed in two-drug regimens, Juluca and Dovato, might have helped the company to offset some of the losses in sales of three-drug regimens.
In Consumer Healthcare segment, sales are likely to have been driven by Oral health and Nutrition products. However, rising competition in Europe and declining sales of the Skin health category might have a negative impact.
Earnings Whispers
Our proven model predicts an earnings beat for Glaxo in the soon-to-be reported quarter. 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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (85 cents) and the Zacks Consensus Estimate (83 cents), stands at +3.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some stocks from the broader drugs market that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.
Regeneron Pharmaceuticals, Inc. (REGN - Free Report) has an Earnings ESP of +5.65% and a Zacks Rank #3. The company is scheduled to release third-quarter results on Nov 5.
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Is a Beat in Store for Glaxo (GSK) This Earnings Season?
We expect GlaxoSmithKline plc (GSK - Free Report) to beat expectations when it reports third-quarter 2019 results on Oct 30. In the last reported quarter, the company delivered a positive surprise of 21.88%.
Shares of Glaxo have outperformed the industry so far this year. The stock has returned 11.3% against the industry’s decrease of 0.3%.
Glaxo’s earnings performance has been mixed so far. The company’s earnings surpassed estimates in three of the trailing four quarters and missed the same once with the average beat being 12.74%.
Factors to Consider
Strong demand for its shingles vaccine Shingrix and respiratory drugs is likely to drive sales of Glaxo’s Pharmaceuticals segment. However, rising competition in the HIV segment, especially for three-drug regimens, might have hurt sales.
Growth trend in sales of Respiratory category is likely to have continued in the third quarter on the back of strong demand for Trelegy Ellipta and Nucala. Launch of self-administration option for Nucala in June might have boosted the drug’s sales this quarter. However, older respiratory drugs including Advair and Relvar/Breo Ellipta facing competitive and pricing pressure are likely to have unfavorably impacted Glaxo’s sales in the soon-to-be reported quarter.
The Vaccines segment is likely to have benefited from sustained uptake of Shingrix. Approval of the vaccine in China in May is likely to have further boosted the sales this quarter. Moreover, meningitis vaccines Bexsero and Menveo, acquired from Novartis AG (NVS - Free Report) , registered a recovery in sales growth in the past couple of quarters. The growth trend is likely to have sustained in the third quarter. However, demand for these vaccines fluctuates every season and therefore sales may vary.
Glaxo’s immuno-inflammation drugs like Benlysta are expected to have recorded growth in the third quarter. Oncology sales, solely from Zejula, are likely to have remained on the growth path.
Meanwhile, competitive environment and the shift in the portfolio toward two-drug regimens are likely to have hurt sales of three-drug regimens — Tivicay and Triumeq — and older HIV drugs. However, strong growth trend witnessed in two-drug regimens, Juluca and Dovato, might have helped the company to offset some of the losses in sales of three-drug regimens.
In Consumer Healthcare segment, sales are likely to have been driven by Oral health and Nutrition products. However, rising competition in Europe and declining sales of the Skin health category might have a negative impact.
Earnings Whispers
Our proven model predicts an earnings beat for Glaxo in the soon-to-be reported quarter. 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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (85 cents) and the Zacks Consensus Estimate (83 cents), stands at +3.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Glaxo has a Zacks Rank #2.
GlaxoSmithKline plc Price and Consensus
GlaxoSmithKline plc price-consensus-chart | GlaxoSmithKline plc Quote
Other Stocks to Consider
Here are some stocks from the broader drugs market that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.
Incyte Corporation (INCY - Free Report) has an Earnings ESP of +1.15% and a Zacks Rank #1. The company is scheduled to release third-quarter results on Oct 29. You can see the complete list of today’s Zacks #1 Rank stocks here.
Regeneron Pharmaceuticals, Inc. (REGN - Free Report) has an Earnings ESP of +5.65% and a Zacks Rank #3. The company is scheduled to release third-quarter results on Nov 5.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>