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What's in the Cards for Glaxo (GSK) This Earnings Season?
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GlaxoSmithKline plc (GSK - Free Report) is scheduled to report second-quarter 2020 results on Jul 29. In the last reported quarter, the company delivered a positive earnings surprise of 22.78%.
Shares of Glaxo have underperformed the industry so far this year. The stock has declined 14.2% against the industry’s increase of 0.8%.
Glaxo’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, delivering beat of 13.31%, on average.
Factors to Consider
Strong demand for its shingles vaccine, Shingrix and newer respiratory drugs is likely to have driven sales of Glaxo’s Pharmaceuticals segment. However, the company, on its first-quarter earnings call, had warned that uncertainty related to the coronavirus pandemic could hurt demand of elective or discretionary treatments and vaccines such as Shingrix.
Meanwhile, the impact of Advair generics and rising competition in the HIV segment, especially for three-drug regimens, might have hurt sales.
The growth trend in sales of the Respiratory category is likely to have continued in the second quarter on the back of strong demand for Trelegy Ellipta and Nucala. However, older respiratory drugs — Advair and Relvar/Breo Ellipta — facing competitive and pricing pressure are likely to have unfavorably impacted Glaxo’s sales.
Although uptake of Shingrix was strong in the past few quarters, sales of Shingrix might have been weak in the second quarter due to coronavirus pandemic. Sales of meningitis vaccine, Bexsero, acquired from Novartis AG (NVS - Free Report) , demonstrated growth in the past few quarters. The trend is likely to have continued in the second quarter. Menveo sales surged in the last-reported quarter. We note that demand for these vaccines fluctuates every season and therefore, sales may vary.
Sales of Glaxo’s lupus drug, Benlysta, showed impressive growth in the previous three quarters. Oncology sales, solely from Zejula, are also likely to have witnessed growth. Moreover, the FDA approved the label expansion of Zejula as first-line maintenance treatment of ovarian cancer patients regardless of biomarker status in April. Expansion of targeted patent population is likely to have boosted sales in the second quarter.
Meanwhile, the competitive environment and the shift in portfolio toward two-drug regimens may have hurt sales of three-drug regimens — Tivicay and Triumeq — and older HIV drugs. However, the strong growth trend witnessed in two-drug regimens, Juluca and Dovato, might have helped the company to partially offset some of the losses in sales of three-drug regimens.
Second-quarter sales of consumer healthcare business are likely to have been driven by Glaxo’s Wellness, Oral health and Nutrition products as well as Pfizer’s legacy products. Glaxo formed a joint venture with Pfizer (PFE - Free Report) in August 2019 to create the world’s largest consumer healthcare business. However, positive impact of stockpiling in the first quarter, due to COVID-19-led shutdowns, is likely to have reversed in the second quarter.
Please note that a small level of disruption associated with delayed diagnosis and new patient starts is expected to have hurt sales of some drugs in the second quarter.
We expect the company to provide an update on its anticipated impact of this global crisis on its future business on the call.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Glaxo this reporting cycle. 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 as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (49 cents per share) and the Zacks Consensus Estimate (54 cents per share) is -9.82%.
Here is a large biotech stock you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this season.
Incyte Corporation (INCY - Free Report) has an Earnings ESP of +4.62% and a Zacks Rank #3.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Image: Bigstock
What's in the Cards for Glaxo (GSK) This Earnings Season?
GlaxoSmithKline plc (GSK - Free Report) is scheduled to report second-quarter 2020 results on Jul 29. In the last reported quarter, the company delivered a positive earnings surprise of 22.78%.
Shares of Glaxo have underperformed the industry so far this year. The stock has declined 14.2% against the industry’s increase of 0.8%.
Glaxo’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, delivering beat of 13.31%, on average.
Factors to Consider
Strong demand for its shingles vaccine, Shingrix and newer respiratory drugs is likely to have driven sales of Glaxo’s Pharmaceuticals segment. However, the company, on its first-quarter earnings call, had warned that uncertainty related to the coronavirus pandemic could hurt demand of elective or discretionary treatments and vaccines such as Shingrix.
Meanwhile, the impact of Advair generics and rising competition in the HIV segment, especially for three-drug regimens, might have hurt sales.
The growth trend in sales of the Respiratory category is likely to have continued in the second quarter on the back of strong demand for Trelegy Ellipta and Nucala. However, older respiratory drugs — Advair and Relvar/Breo Ellipta — facing competitive and pricing pressure are likely to have unfavorably impacted Glaxo’s sales.
Although uptake of Shingrix was strong in the past few quarters, sales of Shingrix might have been weak in the second quarter due to coronavirus pandemic. Sales of meningitis vaccine, Bexsero, acquired from Novartis AG (NVS - Free Report) , demonstrated growth in the past few quarters. The trend is likely to have continued in the second quarter. Menveo sales surged in the last-reported quarter. We note that demand for these vaccines fluctuates every season and therefore, sales may vary.
Sales of Glaxo’s lupus drug, Benlysta, showed impressive growth in the previous three quarters. Oncology sales, solely from Zejula, are also likely to have witnessed growth. Moreover, the FDA approved the label expansion of Zejula as first-line maintenance treatment of ovarian cancer patients regardless of biomarker status in April. Expansion of targeted patent population is likely to have boosted sales in the second quarter.
Meanwhile, the competitive environment and the shift in portfolio toward two-drug regimens may have hurt sales of three-drug regimens — Tivicay and Triumeq — and older HIV drugs. However, the strong growth trend witnessed in two-drug regimens, Juluca and Dovato, might have helped the company to partially offset some of the losses in sales of three-drug regimens.
Second-quarter sales of consumer healthcare business are likely to have been driven by Glaxo’s Wellness, Oral health and Nutrition products as well as Pfizer’s legacy products. Glaxo formed a joint venture with Pfizer (PFE - Free Report) in August 2019 to create the world’s largest consumer healthcare business. However, positive impact of stockpiling in the first quarter, due to COVID-19-led shutdowns, is likely to have reversed in the second quarter.
Please note that a small level of disruption associated with delayed diagnosis and new patient starts is expected to have hurt sales of some drugs in the second quarter.
We expect the company to provide an update on its anticipated impact of this global crisis on its future business on the call.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Glaxo this reporting cycle. 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 as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (49 cents per share) and the Zacks Consensus Estimate (54 cents per share) is -9.82%.
Zacks Rank: Glaxo currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
GlaxoSmithKline plc Price and Consensus
GlaxoSmithKline plc price-consensus-chart | GlaxoSmithKline plc Quote
Stock to Consider
Here is a large biotech stock you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this season.
Incyte Corporation (INCY - Free Report) has an Earnings ESP of +4.62% and a Zacks Rank #3.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>