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Drug Stocks to Report Q4 Earnings on Feb 2: MRK & AMGN
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With the Q4 earnings season well underway, approximately 170 S&P 500 members (representing 33.9% of the index’s total market capitalization) have reported quarterly results as of Jan 27. An impressive 64.1% of these companies managed to post an earnings beat, while 54.7% declared better-than-expected sales.
Although earnings growth seems to have improved notably since the last couple of years, positive surprises, particularly on the earnings front, are still tracking below other historical periods.
As per our Earnings Preview report, earnings for the S&P 500 companies are on track to surge 5.2% year over year in Q4 on 4.0% higher revenues.
A large number of earnings reports are yet to be released with more than 413 companies including 106 S&P 500 members expected to reveal quarterly numbers this week. This should offer better visibility on the overall earnings picture.
How have Drug Stocks Fared So Far?
Quite a few major pharma and biotech companies have reported results so far with performance being mixed. Biogen Inc (BIIB - Free Report) and Johnson & Johnson (JNJ - Free Report) reported mixed results, wherein earnings beat estimates but revenues missed the same. Eli Lilly and Company (LLY - Free Report) and Pfizer, Inc. (PFE - Free Report) , on the other hand, beat on revenues but missed earnings expectations.
We note that Medical is one of the sectors expected to record growth in the positive territory in the fourth quarter with earnings expected to improve 2.9% on a revenue improvement of 5.7%.
As of Jan 27, 25.9% companies in the Medical sector reported results, putting up a blended beat of 42.9% (the percentage of companies that have beaten both earnings and revenue estimates). Overall the sector has registered 16.2% earnings growth on 6.6% higher revenues.
The sector has been facing challenging conditions for more than a year now due to constant media and political attention on drug pricing issues. With this in the backdrop, let’s take a sneak peek into two companies in the medical sector that are scheduled to report fourth-quarter 2016 and full-year results on Feb 2.
What Await these Drug Stocks?
Large-cap pharma stock Merck & Co., Inc. (MRK - Free Report) is scheduled to release results before the market opens. This Kenilworth, NJ-based company’s performance has been pretty impressive, with its earnings exceeding expectations consistently. The average positive earnings beat over the last four quarters is 4.30%. Can this pharma giant keep its earnings streak alive? Merck’s Earnings ESP, is now pegged at 0.00%. Although Merck’s Zacks Rank #3 (Hold) increases the predictive power of ESP, its current 0.00% makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for the quarter is pegged at 88 cents. New products, especially Keytruda (cancer) and Zepatier (HCV), have been doing well and the trend is expected to continue. However, the company will continue to face headwinds in the form of genericization, rising competition, and negative currency exchange impact. (Read more: Merck: Stock to Gain on Likely Earnings Beat in Q4?)
Our previous article shows that Merck was likely to beat on earnings this quarter. However, estimates changed thereafter and we are not confident about an earnings beat this season.
Biotech major Amgen Inc. (AMGN - Free Report) will be reporting earnings results after the market closes. The company has an impressive track record, having surpassed expectations in each of the last four quarters with a positive average surprise of 10.04%. The combination of Amgen’s Zacks Rank #3 and +1.08% Earnings ESP makes us reasonably confident of an earnings beat this season. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the quarter is pegged at $2.77. Products like Xgeva, Vectibix, Sensipar and Prolia should continue driving top-line growth. Focus will also be on the performance of the company’s PCSK9 inhibitor, Repatha. Blockbuster drug Enbrel, which is facing increasing competition in the dermatology segment, will continue to be a drag on the company’s sales. (Read more: Will Amgen Keep the Earnings Streak Alive in Q4?)
Stay tuned and check later on our full write-up on earnings releases of these stocks!
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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Drug Stocks to Report Q4 Earnings on Feb 2: MRK & AMGN
With the Q4 earnings season well underway, approximately 170 S&P 500 members (representing 33.9% of the index’s total market capitalization) have reported quarterly results as of Jan 27. An impressive 64.1% of these companies managed to post an earnings beat, while 54.7% declared better-than-expected sales.
Although earnings growth seems to have improved notably since the last couple of years, positive surprises, particularly on the earnings front, are still tracking below other historical periods.
As per our Earnings Preview report, earnings for the S&P 500 companies are on track to surge 5.2% year over year in Q4 on 4.0% higher revenues.
A large number of earnings reports are yet to be released with more than 413 companies including 106 S&P 500 members expected to reveal quarterly numbers this week. This should offer better visibility on the overall earnings picture.
How have Drug Stocks Fared So Far?
Quite a few major pharma and biotech companies have reported results so far with performance being mixed. Biogen Inc (BIIB - Free Report) and Johnson & Johnson (JNJ - Free Report) reported mixed results, wherein earnings beat estimates but revenues missed the same. Eli Lilly and Company (LLY - Free Report) and Pfizer, Inc. (PFE - Free Report) , on the other hand, beat on revenues but missed earnings expectations.
We note that Medical is one of the sectors expected to record growth in the positive territory in the fourth quarter with earnings expected to improve 2.9% on a revenue improvement of 5.7%.
As of Jan 27, 25.9% companies in the Medical sector reported results, putting up a blended beat of 42.9% (the percentage of companies that have beaten both earnings and revenue estimates). Overall the sector has registered 16.2% earnings growth on 6.6% higher revenues.
The sector has been facing challenging conditions for more than a year now due to constant media and political attention on drug pricing issues. With this in the backdrop, let’s take a sneak peek into two companies in the medical sector that are scheduled to report fourth-quarter 2016 and full-year results on Feb 2.
What Await these Drug Stocks?
Large-cap pharma stock Merck & Co., Inc. (MRK - Free Report) is scheduled to release results before the market opens. This Kenilworth, NJ-based company’s performance has been pretty impressive, with its earnings exceeding expectations consistently. The average positive earnings beat over the last four quarters is 4.30%. Can this pharma giant keep its earnings streak alive? Merck’s Earnings ESP, is now pegged at 0.00%. Although Merck’s Zacks Rank #3 (Hold) increases the predictive power of ESP, its current 0.00% makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for the quarter is pegged at 88 cents. New products, especially Keytruda (cancer) and Zepatier (HCV), have been doing well and the trend is expected to continue. However, the company will continue to face headwinds in the form of genericization, rising competition, and negative currency exchange impact. (Read more: Merck: Stock to Gain on Likely Earnings Beat in Q4?)
Our previous article shows that Merck was likely to beat on earnings this quarter. However, estimates changed thereafter and we are not confident about an earnings beat this season.
Merck & Company, Inc. Price and EPS Surprise
Merck & Company, Inc. Price and EPS Surprise | Merck & Company, Inc. Quote
Biotech major Amgen Inc. (AMGN - Free Report) will be reporting earnings results after the market closes. The company has an impressive track record, having surpassed expectations in each of the last four quarters with a positive average surprise of 10.04%. The combination of Amgen’s Zacks Rank #3 and +1.08% Earnings ESP makes us reasonably confident of an earnings beat this season. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the quarter is pegged at $2.77. Products like Xgeva, Vectibix, Sensipar and Prolia should continue driving top-line growth. Focus will also be on the performance of the company’s PCSK9 inhibitor, Repatha. Blockbuster drug Enbrel, which is facing increasing competition in the dermatology segment, will continue to be a drag on the company’s sales. (Read more: Will Amgen Keep the Earnings Streak Alive in Q4?)
Amgen Inc. Price and EPS Surprise
Amgen Inc. Price and EPS Surprise | Amgen Inc. Quote
Stay tuned and check later on our full write-up on earnings releases of these stocks!
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>