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Teva (TEVA) to Report Q1 Earnings: What's in the Cards?

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Teva Pharmaceutical Industries Limited (TEVA - Free Report) is scheduled to report first-quarter 2020 results on May 7 before market open.

In the last reported quarter, the company delivered in-line earnings.

Teva Pharmaceutical Industries Ltd. Price and EPS Surprise

Teva Pharmaceutical Industries Ltd. Price and EPS Surprise

 

 

 

 

 

 

 

Teva Pharmaceutical Industries Ltd. price-eps-surprise | Teva Pharmaceutical Industries Ltd. Quote

Teva share price has risen 3.5% this year so far against the industry’s decrease of 4%.

 

Teva’s earnings performance has been mixed, with the company beating expectations in two of the past four quarters, matching estimates in one and missing the same in the remaining quarter. The four-quarter average positive earnings surprise is 0.89%.

Factors to Consider

In the first quarter, Teva’s branded drug sales are expected to have been hurt by generic erosion in sales of Copaxone and lower sales of Bendeka/Treanda. However, its new branded drug Austedo is expected to have provided top-line support like in the last two reported quarters.

Sales of its new CGRP, Ajovy were soft in the last two reported quarters. Management, in the past, had attributed the lower market share to preference of patients for auto injectors while Ajovy is available as a subcutaneous injection. Importantly, Teva’s auto injector device for Ajovy is now approved in the United States and EU and was launched in the United States last week. We expect management to discuss how this new device will help improve market share of the drug on the first-quarter conference call.

The Zacks Consensus Estimate for sales of Ajovy and Austedo in North America is $29.12 million and $132 million, respectively.

Teva’s new generic product launches including Truxima (biosimilar version of Roche’s [(RHHBY - Free Report) ] cancer drug Rituxan) are likely to have boosted sales of its Generics unit, making up for price erosion. Herzuma, Teva’s biosimilar to Roche’s Herceptin was launched in March.  However, its contribution to first-quarter sales is expected to have been minimal.

Teva saw stabilization of the generic pricing environment in the United States as well as Europe in 2019. On the fourth-quarter conference call, the company had said that in 2020, it expects both North America and Europe generics to be relatively stable compared to 2019, benefiting from generic launches, which will offset the impact of generic erosion. An update is expected on the first-quarter conference call

The Zacks Consensus Estimate for sales of Copaxone and Generic Products in North America is $193 million and $943 million, respectively.

Importantly, on the first-quarter earnings call, investors will want to know the impact of the coronavirus outbreak on Teva’s sales. Importantly, on the first-quarter earnings call, investors will also focus on whether Teva provides an updated business outlook for 2020 to include the impact of coronavirus.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Teva 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 -2.26% as the Zacks Consensus Estimate stands at 59 cents per share while the Most Accurate Estimate is 58 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Stocks to Consider

Here are some biotech stocks that have the right combination of elements to beat on earnings this time around:

Alnylam Pharmaceuticals, Inc. (ALNY - Free Report) with an Earnings ESP of +4.44% and a Zacks Rank #3. The company is scheduled to release results on May 6. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alexion Pharmaceuticals (ALXN - Free Report) has an Earnings ESP of +1.08% and a Zacks Rank #3. The company is scheduled to release results on May 6.

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