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Allergan (AGN) to Report Q4 Earnings: What's in the Cards?

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Allergan plc (AGN - Free Report) is due to report fourth-quarter and full-year 2019 results on Feb 10. In the last reported quarter, the company delivered in-line earnings.

Allergan’s share price has risen 45.1% in the past year compared with the industry’s increase of 4.2%.

 

Allergan’s earnings performance has been strong, with the company beating expectations in three of the past four quarters while matching estimates in one. The four-quarter average positive earnings surprise is 2.76%.

Allergan plc Price and Consensus

Factors to Consider

Allergan’s sales in the fourth quarter are likely to have been hurt by loss of exclusivity on some brands and divestitures of some brands. As in the previous couple of quarters, sales of blockbuster drug Restasis may have declined in the quarter.

Nonetheless, key products like Botox (both cosmetic and therapeutic), Juvéderm collection of fillers, Vraylar, Ozurdex and Lo Loestrin are likely to have supported sales growth in the quarter. Sales of Alloderm and CoolSculpting are likely to have declined in the quarter.

Allergan is due to be acquired by AbbVie (ABBV - Free Report) in a cash-and-stock deal worth nearly $63 billion per an announcement in June last year. The merger is expected to close this quarter. In connection with the pending merger, last month, Allergan announced a definitive agreement to divest its mid-stage immunology candidate brazikumab and marketed medicine, Zenpep to AstraZeneca (AZN - Free Report) and Nestle, respectively. Some questions on the progress of the merger deal are expected on the fourth-quarter conference call.

In December 2019, Ubrelvy (ubrogepant), Allergan’s oral CGRP antagonist for migraine, was approved by the FDA. We expect management to discuss launch/commercialization plans for the same on the conference call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Allergan 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. But that is not the case here.

Earnings ESP: Its Earnings ESP is -1.04% as the Zacks Consensus Estimate of $4.61 is higher than the Most Accurate Estimate of $4.56. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Allergan carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

A biotech company that has the right combination of elements to beat on earnings this time around is Horizon Therapeutics (HZNP - Free Report) . It has an Earnings ESP of +1.85% and a Zacks Rank #3. The company is scheduled to release results on Feb 26.

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