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J&J (JNJ) to Initiate Q1 Earnings Season for Pharma Sector
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Johnson & Johnson (JNJ - Free Report) will report first-quarter 2023 results on Apr 18, before market open. In the last reported quarter, the company delivered an earnings surprise of 5.86%.
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 2.94%, on average.
J&J’s stock has declined 7.6% in the past year against an increase of 6.1% for the industry.
Image Source: Zacks Investment Research
Factors to Consider
J&J’s Pharma segment is expected to have contributed to the top line led by increased penetration and market share gains of key products such as Darzalex and Stelara. Regarding Stelara, while J&J expects Stelara volumes to increase till the loss of exclusivity in late 2023, the growth might have been hurt by pricing pressure as well as potential increased austerity measures across Europe.
Our model estimates Darzalex and Stelara sales of $2.14 billion and $2.42 billion, respectively.
Other core products like Invega Sustenna and new drugs, Erleada and Tremfya, might have also contributed significantly to sales growth.
However, lower sales of its key medicine, Imbruvica is likely to have hurt the top line in the first quarter. Rising competitive pressure in the United States from novel oral agents is likely to have hurt sales of the key drug, Imbruvica. Also, below pre-COVID levels in the chronic lymphocytic leukemia market are expected to have hurt sales in the United States. Our model estimates Imbruvica sales to be $870.6 million.
Generic/biosimilar competition for drugs like Zytiga and Remicade is likely to have hurt the top line.
Our model estimates J&J’s Pharmaceuticals unit revenues to be $12.62 billion.
Overall, Pharmaceuticals unit sales had slowed down in the fourth quarter though it was an above-market performance. It remains to be seen if the sales trend improved in the first quarter of 2023.
With regard to the MedTech segment, sales are expected to have been driven by continued recovery in surgical procedures, better commercial execution and new product launches. However, lingering headwinds from hospital staffing and the effects of the COVID resurgence in China along with volume-based procurement issues in the country are expected to have hurt international sales. Our model estimates J&J’s MedTech segment revenues to be $7.32 billion.
In the Consumer Healthcare segment, while continued growth in markets and strategic price increases are expected to benefit results in the first quarter, some challenges like inflationary pressure within the supply chain and higher input costs are expected to continue to hurt profits.
Our model estimates J&J’s Consumer Health segment revenues to be $3.64 billion.
Overall, currency headwinds are expected to have a negative impact on J&J’s top line in the first quarter.
J&J expects supply constraints, inflationary pressure and rising input costs to continue to hurt margins in the first quarter of 2023
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for J&J 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: J&J’s Earnings ESP -0.85% as the Zacks Consensus Estimate of $2.51 per share is higher than the Most Accurate Estimate of $2.49 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: J&J has a Zacks Rank #3.
Stocks to Consider
Here are some large drug stocks that have the right combination of elements to beat on earnings this time around:
Lilly’s stock has risen 24.3% in the past year. Lilly beat earnings estimates in three of the last four quarters. LLY has a four-quarter negative earnings surprise of 0.73%, on average. Lilly is scheduled to release its first-quarter results on Apr 27.
Novo Nordisk (NVO - Free Report) has an Earnings ESP of +10.31% and a Zacks Rank #1.
Novo Nordisk’s stock has risen 41.8% in the past year. Novo Nordisk topped earnings estimates in three of the last four quarters and has a four-quarter earnings surprise of 3.0%, on average. NVO is scheduled to release its first-quarter results on May 4.
AbbVie (ABBV - Free Report) has an Earnings ESP of +3.21% and a Zacks Rank #3.
AbbVie’s stock has risen 0.2% in the past year. AbbVie beat earnings estimates in all the last four quarters. ABBV has a four-quarter earnings surprise of 1.66%, on average. ABBV is scheduled to release its first-quarter results on Apr 27.
Image: Bigstock
J&J (JNJ) to Initiate Q1 Earnings Season for Pharma Sector
Johnson & Johnson (JNJ - Free Report) will report first-quarter 2023 results on Apr 18, before market open. In the last reported quarter, the company delivered an earnings surprise of 5.86%.
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 2.94%, on average.
J&J’s stock has declined 7.6% in the past year against an increase of 6.1% for the industry.
Image Source: Zacks Investment Research
Factors to Consider
J&J’s Pharma segment is expected to have contributed to the top line led by increased penetration and market share gains of key products such as Darzalex and Stelara. Regarding Stelara, while J&J expects Stelara volumes to increase till the loss of exclusivity in late 2023, the growth might have been hurt by pricing pressure as well as potential increased austerity measures across Europe.
Our model estimates Darzalex and Stelara sales of $2.14 billion and $2.42 billion, respectively.
Other core products like Invega Sustenna and new drugs, Erleada and Tremfya, might have also contributed significantly to sales growth.
However, lower sales of its key medicine, Imbruvica is likely to have hurt the top line in the first quarter. Rising competitive pressure in the United States from novel oral agents is likely to have hurt sales of the key drug, Imbruvica. Also, below pre-COVID levels in the chronic lymphocytic leukemia market are expected to have hurt sales in the United States. Our model estimates Imbruvica sales to be $870.6 million.
Generic/biosimilar competition for drugs like Zytiga and Remicade is likely to have hurt the top line.
Our model estimates J&J’s Pharmaceuticals unit revenues to be $12.62 billion.
Overall, Pharmaceuticals unit sales had slowed down in the fourth quarter though it was an above-market performance. It remains to be seen if the sales trend improved in the first quarter of 2023.
With regard to the MedTech segment, sales are expected to have been driven by continued recovery in surgical procedures, better commercial execution and new product launches. However, lingering headwinds from hospital staffing and the effects of the COVID resurgence in China along with volume-based procurement issues in the country are expected to have hurt international sales. Our model estimates J&J’s MedTech segment revenues to be $7.32 billion.
In the Consumer Healthcare segment, while continued growth in markets and strategic price increases are expected to benefit results in the first quarter, some challenges like inflationary pressure within the supply chain and higher input costs are expected to continue to hurt profits.
Our model estimates J&J’s Consumer Health segment revenues to be $3.64 billion.
Overall, currency headwinds are expected to have a negative impact on J&J’s top line in the first quarter.
J&J expects supply constraints, inflationary pressure and rising input costs to continue to hurt margins in the first quarter of 2023
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for J&J 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: J&J’s Earnings ESP -0.85% as the Zacks Consensus Estimate of $2.51 per share is higher than the Most Accurate Estimate of $2.49 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: J&J has a Zacks Rank #3.
Stocks to Consider
Here are some large drug stocks that have the right combination of elements to beat on earnings this time around:
Eli Lilly (LLY - Free Report) has an Earnings ESP of +10.55% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lilly’s stock has risen 24.3% in the past year. Lilly beat earnings estimates in three of the last four quarters. LLY has a four-quarter negative earnings surprise of 0.73%, on average. Lilly is scheduled to release its first-quarter results on Apr 27.
Novo Nordisk (NVO - Free Report) has an Earnings ESP of +10.31% and a Zacks Rank #1.
Novo Nordisk’s stock has risen 41.8% in the past year. Novo Nordisk topped earnings estimates in three of the last four quarters and has a four-quarter earnings surprise of 3.0%, on average. NVO is scheduled to release its first-quarter results on May 4.
AbbVie (ABBV - Free Report) has an Earnings ESP of +3.21% and a Zacks Rank #3.
AbbVie’s stock has risen 0.2% in the past year. AbbVie beat earnings estimates in all the last four quarters. ABBV has a four-quarter earnings surprise of 1.66%, on average. ABBV is scheduled to release its first-quarter results on Apr 27.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.