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5 Drug/Biotech Stocks Set to Outpace Q1 Earnings Estimates
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Of the large drug/biotech companies that have reported so far, most came up with better-than-expected earnings and maintained their guidance for the year. Sales of drugs/medicines that require significant physician office or institutional visits were hurt in the quarter, while oral and self-administered medicines and consumer products benefited from stockpiling.
R&D timelines have been impacted with some companies pausing enrolments in ongoing studies and others delaying new study starts. However, almost all companies have announced R&D initiatives to make therapies or vaccines for COVID-19, mostly through collaborations with their smaller counterparts.
Per the Zacks classification, the pharma/biotech industry comes under the broader Medical sector, which comprises pharma/biotech as well as medical device companies.
Per the Earnings Trends report of Apr 30, 36.5% of the companies in the Medical sector, constituting nearly 58.5% of the sector’s market capitalization, reported earnings. While 73.7% beat earnings estimates, 68.4% beat the same for sales. Earnings are up 16.8% year over year on 9.9% higher revenues. Overall, first-quarter earnings and sales growth for the Medical sector is expected to be 4.5% and 8.3%, respectively.
Zeroing in on Winners
Here we have highlighted five drug/biotech companies, which are expected to deliver positive earnings surprise in their upcoming quarterly earnings announcements.
Earnings ESP is our proprietary methodology for determining the stocks that have the best chance to deliver a positive earnings surprise. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
According to the Zacks model, 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. The selection can be done with the help of the Zacks Stock Screener.
Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
This Cambridge, MA-based biotech focused on the development of novel therapeutics based on RNA interference (RNAi) has an Earnings ESP of +4.44% and a Zacks Rank of 3. The Zacks Consensus Estimate for the first quarter is pegged at a loss of $1.89 per share. The company is scheduled to release results on May 6.
Alnylam beat estimates in two of the last four quarters while missing in the remaining two with the average positive surprise being 5.87%.
Alexion Pharmaceuticals
This New Haven, CT based drugmaker for ultra-rare disorders, has an Earnings ESP of +1.08% and a Zacks Rank #2. The Zacks Consensus Estimate for the first quarter is pegged at $2.70 per share. The company is scheduled to release results on May 6
Alexion’s earnings performance has been encouraging with the company delivering a positive surprise in all the trailing four quarters with the average beat being 9.12%.
This San Diego, CA-based biotech, which makes medicines for central nervous system (CNS) disorders, has as an Earnings ESP of +6.88% and a Zacks Rank of #3. The Zacks Consensus Estimate for the first quarter is pegged at a loss of 46 cents per share. The company is scheduled to release results on May 7
In the trailing four quarters, ACADIA delivered a positive earnings surprise in three of the past four quarters and missed in one with the average positive surprise being 11.38%.
The South San Francisco, CA-based development stage biotech has an Earnings ESP of +2.44% and is #2 Ranked. The Zacks Consensus Estimate for the first quarter is a loss of 57 cents per share. The company is scheduled to release results on May 6.
Allogene’s earnings beat expectations in each of the last four quarters with the average beat being 14.52%.
Horizon Therapeutics Public Limited Company
This Dublin, Ireland-based drugmaker has an Earnings ESP of +2.90% and a Zacks Rank of 3. The Zacks Consensus Estimate for the first quarter is pegged at 23 cents per share. The company is scheduled to release results on May 6.
Horizon Therapeutics beat estimates in each of the trailing four quarters, with the average positive surprise being 71.17%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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5 Drug/Biotech Stocks Set to Outpace Q1 Earnings Estimates
Of the large drug/biotech companies that have reported so far, most came up with better-than-expected earnings and maintained their guidance for the year. Sales of drugs/medicines that require significant physician office or institutional visits were hurt in the quarter, while oral and self-administered medicines and consumer products benefited from stockpiling.
R&D timelines have been impacted with some companies pausing enrolments in ongoing studies and others delaying new study starts. However, almost all companies have announced R&D initiatives to make therapies or vaccines for COVID-19, mostly through collaborations with their smaller counterparts.
Most companies maintained their financial guidance for the year with J&J (JNJ - Free Report) and Merck (MRK - Free Report) being the exceptions. J&J lowered its sales and earnings outlook mainly due to weakness in its Medical Devices unit due to widespread decline in elective surgical procedures. Merck lowered its sales and earnings guidance for 2020 as almost two-third of its pharmaceutical revenues come from physician-administered products.
Per the Zacks classification, the pharma/biotech industry comes under the broader Medical sector, which comprises pharma/biotech as well as medical device companies.
Per the Earnings Trends report of Apr 30, 36.5% of the companies in the Medical sector, constituting nearly 58.5% of the sector’s market capitalization, reported earnings. While 73.7% beat earnings estimates, 68.4% beat the same for sales. Earnings are up 16.8% year over year on 9.9% higher revenues. Overall, first-quarter earnings and sales growth for the Medical sector is expected to be 4.5% and 8.3%, respectively.
Zeroing in on Winners
Here we have highlighted five drug/biotech companies, which are expected to deliver positive earnings surprise in their upcoming quarterly earnings announcements.
Earnings ESP is our proprietary methodology for determining the stocks that have the best chance to deliver a positive earnings surprise. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
According to the Zacks model, 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. The selection can be done with the help of the Zacks Stock Screener.
Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
5 Drug/Biotech Stocks That Match the Criteria
Alnylam Pharmaceuticals (ALNY - Free Report)
This Cambridge, MA-based biotech focused on the development of novel therapeutics based on RNA interference (RNAi) has an Earnings ESP of +4.44% and a Zacks Rank of 3. The Zacks Consensus Estimate for the first quarter is pegged at a loss of $1.89 per share. The company is scheduled to release results on May 6.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Alnylam beat estimates in two of the last four quarters while missing in the remaining two with the average positive surprise being 5.87%.
Alexion Pharmaceuticals
This New Haven, CT based drugmaker for ultra-rare disorders, has an Earnings ESP of +1.08% and a Zacks Rank #2. The Zacks Consensus Estimate for the first quarter is pegged at $2.70 per share. The company is scheduled to release results on May 6
Alexion’s earnings performance has been encouraging with the company delivering a positive surprise in all the trailing four quarters with the average beat being 9.12%.
ACADIA Pharmaceuticals (ACAD - Free Report)
This San Diego, CA-based biotech, which makes medicines for central nervous system (CNS) disorders, has as an Earnings ESP of +6.88% and a Zacks Rank of #3. The Zacks Consensus Estimate for the first quarter is pegged at a loss of 46 cents per share. The company is scheduled to release results on May 7
In the trailing four quarters, ACADIA delivered a positive earnings surprise in three of the past four quarters and missed in one with the average positive surprise being 11.38%.
Allogene Therapeutics (ALLO - Free Report)
The South San Francisco, CA-based development stage biotech has an Earnings ESP of +2.44% and is #2 Ranked. The Zacks Consensus Estimate for the first quarter is a loss of 57 cents per share. The company is scheduled to release results on May 6.
Allogene’s earnings beat expectations in each of the last four quarters with the average beat being 14.52%.
Horizon Therapeutics Public Limited Company
This Dublin, Ireland-based drugmaker has an Earnings ESP of +2.90% and a Zacks Rank of 3. The Zacks Consensus Estimate for the first quarter is pegged at 23 cents per share. The company is scheduled to release results on May 6.
Horizon Therapeutics beat estimates in each of the trailing four quarters, with the average positive surprise being 71.17%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>