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Drug Stocks to Report Earnings on Jul 26: AMGN, ALXN & More
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The Q2 earnings season has so far seen releases from 87 S&P 500 members. The season has been seeing strong earnings on the back of solid revenues. This week will be a busy one with 750 companies, including 175 S&P 500 members, slated to report their quarterly numbers
Story So Far
Till the end of last week, 87 S&P 500 companies reported earnings that combined account for about 25.7% of the total market capitalization of the index. According to the latest Earnings Preview, total earnings for these companies are up 20.9% from the same period last year on 10.3% higher revenues. Meanwhile, 86.2% of these companies surpassed earnings estimates while 77% beat revenue estimates.
Please note that the broader Medical sector (includes drug, biotech as well as Medical Device companies) is expected to record year-over-year growth of 6.4% in revenues and 9.1% in earnings in the second quarter.
So far, four drug/biotech bigwigs have reported second-quarter results.Johnson and Johnson set the 2018 pharma earnings in motion by beating the Zacks Consensus Estimate for both earnings and sales in the second quarter of 2018. Swiss pharma giant Novartis AG reported results for second-quarter 2018, wherein revenues beat estimate, driven by strong performance of its drugs Cosentyx and Entresto. However, earnings fell short.
Eli Lilly and Company (LLY - Free Report) also beat both earnings and revenue estimates in the second quarter. Earnings were backed by robust growth in new product sales, lower operating costs and lower tax rates.
Biogen (BIIB - Free Report) also beat both the earnings and revenue estimates in the second quarter. Strong growth sequentially at key drugs led to an increase in the stock price the day the company released its earnings.
Here we have five other drug/biotech bigwigs, which are scheduled to release their second-quarter earnings on Jul 26. Let's see how things are shaping up for these announcements.
Amgen Inc. (AMGN - Free Report) delivered a positive earnings surprise of 7.43% in the last quarter. Amgen’s performance has been decent, with the company delivering a positive surprise in three out of the trailing four quarters. The average earnings beat over the last four quarters is 3.54%.
Amgen’s newer products like Prolia, Kyprolis, Xgeva, Repatha and Blincyto should continue to perform well backed by higher demand, making up for lower sales of mature brands like Enbrel, Aranesp, Epogen, Neulasta and Neupogen due to competitive pressure.Continued growth in new patient starts and strong repeat injection rates should drive sales of Prolia.
Our proven model provides some idea about the stocks that are about to release their earnings results. Per our model, a stock needs a combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
We expect biotech major Amgen to beat expectations when it reports second-quarter 2018 results on Jul 26, after market close. Amgen has a Zacks Rank #3. The combination of Amgen’s Zacks Rank #3 and an ESP of +1.46% makes us confident of an earnings beat in the upcoming release.
Amgen’s shares have risen 10.1% so far this year against the 2.7% decrease registered by the industry during this period.
On the earnings call, investors’ focus will be on management’s comments on the launch preparations for newly approved migraine drug, Aimovig. Aimovig was approved by the FDA in mid-May. Aimovig is under review in the EU.(Read more:Amgen to Report Q2 Earnings: Will it Beat Again?).
Alexion Pharmaceuticals, Inc. has an excellent track record having recorded better-than-expected results in all of the trailing four quarters, with an average positive earnings surprise of 15.31%.
Alexion’s shares have outperformed the industry, so far this year. The stock has gained 13.1% against the industry’s decline of 2.7%.
Alexion is likely to beat on earnings in the to-be-reported quarter because it carries a Zacks Rank #2 and has an ESP of +0.94%.
Alexion’s blockbuster drug, Soliris, continues to perform well. The company is working on expanding Soliris’ label for additional indications. Label expansion in additional indications will give Soliris access to a higher patient population and increase the commercial potential of the drug significantly.
Allergan plc delivered a positive earnings surprise of 11.31% in the last reported quarter.
Allergan’s share price has risen 6.9% this year so far against the industry’s decline of 4.8%.
Allergan’s earnings performance has been strong, with the company beating expectations in each of the past four quarters. The average positive earnings surprise over the last four quarters is 4.41%.
Our previous article showed that Allergan was not likely to beat on earnings this quarter. However, estimates changed thereafter and we are now more certain of a beat this earnings season. Allergan’s Zacks Rank #2 along with an ESP of +0.17% increases the predictive power of an earnings surprise .
Investors’ focus on the call will be on management’s comments on the potential impact of generic competition for key growth driving drugs, Restasis and Namenda XR.(Read More: Allergan to Report Q2 Earnings: What's in the Cards?).
Bristol-Myers Squibb Company (BMY - Free Report) delivered positive earnings surprise in three of the last four quarters. The average positive earnings surprise in the last four quarters is 2.71%. In the last reported quarter, Bristol-Myers delivered a positive surprise of 10.59%.
Bristol-Myers’ shares have decreased 4.9% so far this year compared with the industry’s growth of 0.4%.
Bristol-Myers is likely to beat earnings estimates this quarter. The company carries a Zacks Rank #3 and an ESP of +0.65%.
Bristol-Myers’ blockbuster immuno-oncology drug, Opdivo is expected to remain one of the primary drivers of sales in the second quarter. The drug has been approved for several line extensions in the past year. In the to-be reported quarter, Opdivo was approved as a monotherapy for the treatment of squamous cell carcinoma of the head and neck in Europe. The drug also received approval in China for the treatment of non-small cell lung cancer (“NSCLC”) in second-line setting.
Celgene’s track record has been excellent with the company beating earnings estimates in all of the trailing four quarters. Overall, the company has delivered an average positive surprise of 2.37%.
However, our proven model does not conclusively show that Celgene is likely to beat earnings estimates this quarter. The company carries a Zacks Rank #4 (Sell) and an ESP of -0.20%.
Celgene’s stock has lost 16.4% in the year so far compared with the industry’s 2.7% decline.
Celgene’s key product, Revlimid, should continue to act as the main growth driver in the second quarter. Revlimid, an oral immunomodulatory drug, is currently approved for several indications, including newly diagnosed multiple myeloma (MM), myelodysplastic syndromes (MDS) and mantle cell lymphoma (MCL). Market share gains in key markets and longer treatment duration are contributing to the drug’s growth. Celgene is also currently working on label expansion of drugs like Pomalyst/Imnovid, Abraxane and Otezla among others, which is encouraging.
On the second-quarter call, investors are expected to gain more visibility on the company’s performance and label-expansion efforts, along with updates on the pipeline front.(Read more:Celgene Q2 Earnings: Disappointment in Store?).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Drug Stocks to Report Earnings on Jul 26: AMGN, ALXN & More
The Q2 earnings season has so far seen releases from 87 S&P 500 members. The season has been seeing strong earnings on the back of solid revenues. This week will be a busy one with 750 companies, including 175 S&P 500 members, slated to report their quarterly numbers
Story So Far
Till the end of last week, 87 S&P 500 companies reported earnings that combined account for about 25.7% of the total market capitalization of the index. According to the latest Earnings Preview, total earnings for these companies are up 20.9% from the same period last year on 10.3% higher revenues. Meanwhile, 86.2% of these companies surpassed earnings estimates while 77% beat revenue estimates.
Please note that the broader Medical sector (includes drug, biotech as well as Medical Device companies) is expected to record year-over-year growth of 6.4% in revenues and 9.1% in earnings in the second quarter.
So far, four drug/biotech bigwigs have reported second-quarter results.Johnson and Johnson set the 2018 pharma earnings in motion by beating the Zacks Consensus Estimate for both earnings and sales in the second quarter of 2018. Swiss pharma giant Novartis AG reported results for second-quarter 2018, wherein revenues beat estimate, driven by strong performance of its drugs Cosentyx and Entresto. However, earnings fell short.
Eli Lilly and Company (LLY - Free Report) also beat both earnings and revenue estimates in the second quarter. Earnings were backed by robust growth in new product sales, lower operating costs and lower tax rates.
Biogen (BIIB - Free Report) also beat both the earnings and revenue estimates in the second quarter. Strong growth sequentially at key drugs led to an increase in the stock price the day the company released its earnings.
Here we have five other drug/biotech bigwigs, which are scheduled to release their second-quarter earnings on Jul 26. Let's see how things are shaping up for these announcements.
Amgen Inc. (AMGN - Free Report) delivered a positive earnings surprise of 7.43% in the last quarter. Amgen’s performance has been decent, with the company delivering a positive surprise in three out of the trailing four quarters. The average earnings beat over the last four quarters is 3.54%.
Amgen’s newer products like Prolia, Kyprolis, Xgeva, Repatha and Blincyto should continue to perform well backed by higher demand, making up for lower sales of mature brands like Enbrel, Aranesp, Epogen, Neulasta and Neupogen due to competitive pressure.Continued growth in new patient starts and strong repeat injection rates should drive sales of Prolia.
Our proven model provides some idea about the stocks that are about to release their earnings results. Per our model, a stock needs a combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
We expect biotech major Amgen to beat expectations when it reports second-quarter 2018 results on Jul 26, after market close. Amgen has a Zacks Rank #3. The combination of Amgen’s Zacks Rank #3 and an ESP of +1.46% makes us confident of an earnings beat in the upcoming release.
Amgen’s shares have risen 10.1% so far this year against the 2.7% decrease registered by the industry during this period.
On the earnings call, investors’ focus will be on management’s comments on the launch preparations for newly approved migraine drug, Aimovig. Aimovig was approved by the FDA in mid-May. Aimovig is under review in the EU.(Read more:Amgen to Report Q2 Earnings: Will it Beat Again?).
Alexion Pharmaceuticals, Inc. has an excellent track record having recorded better-than-expected results in all of the trailing four quarters, with an average positive earnings surprise of 15.31%.
Alexion’s shares have outperformed the industry, so far this year. The stock has gained 13.1% against the industry’s decline of 2.7%.
Alexion is likely to beat on earnings in the to-be-reported quarter because it carries a Zacks Rank #2 and has an ESP of +0.94%.
Alexion’s blockbuster drug, Soliris, continues to perform well. The company is working on expanding Soliris’ label for additional indications. Label expansion in additional indications will give Soliris access to a higher patient population and increase the commercial potential of the drug significantly.
On the earnings call, investors’ focus will be on pipeline candidates especially-ALXN1210. (Read more: Is a Beat in Store for Alexion This Earnings Season?).
Allergan plc delivered a positive earnings surprise of 11.31% in the last reported quarter.
Allergan’s share price has risen 6.9% this year so far against the industry’s decline of 4.8%.
Allergan’s earnings performance has been strong, with the company beating expectations in each of the past four quarters. The average positive earnings surprise over the last four quarters is 4.41%.
Our previous article showed that Allergan was not likely to beat on earnings this quarter. However, estimates changed thereafter and we are now more certain of a beat this earnings season. Allergan’s Zacks Rank #2 along with an ESP of +0.17% increases the predictive power of an earnings surprise .
Investors’ focus on the call will be on management’s comments on the potential impact of generic competition for key growth driving drugs, Restasis and Namenda XR.(Read More: Allergan to Report Q2 Earnings: What's in the Cards?).
Bristol-Myers Squibb Company (BMY - Free Report) delivered positive earnings surprise in three of the last four quarters. The average positive earnings surprise in the last four quarters is 2.71%. In the last reported quarter, Bristol-Myers delivered a positive surprise of 10.59%.
Bristol-Myers’ shares have decreased 4.9% so far this year compared with the industry’s growth of 0.4%.
Bristol-Myers is likely to beat earnings estimates this quarter. The company carries a Zacks Rank #3 and an ESP of +0.65%.
Bristol-Myers’ blockbuster immuno-oncology drug, Opdivo is expected to remain one of the primary drivers of sales in the second quarter. The drug has been approved for several line extensions in the past year. In the to-be reported quarter, Opdivo was approved as a monotherapy for the treatment of squamous cell carcinoma of the head and neck in Europe. The drug also received approval in China for the treatment of non-small cell lung cancer (“NSCLC”) in second-line setting.
The investors’ thus remain focused on any update related to regulatory application for approval of Opdivo in the lucrative first-line NSCLC. (Read more: Is a Beat in Store for Bristol-Myers in Q2 Earnings?).
Celgene Corporation
Celgene’s track record has been excellent with the company beating earnings estimates in all of the trailing four quarters. Overall, the company has delivered an average positive surprise of 2.37%.
However, our proven model does not conclusively show that Celgene is likely to beat earnings estimates this quarter. The company carries a Zacks Rank #4 (Sell) and an ESP of -0.20%.
Celgene’s stock has lost 16.4% in the year so far compared with the industry’s 2.7% decline.
Celgene’s key product, Revlimid, should continue to act as the main growth driver in the second quarter. Revlimid, an oral immunomodulatory drug, is currently approved for several indications, including newly diagnosed multiple myeloma (MM), myelodysplastic syndromes (MDS) and mantle cell lymphoma (MCL). Market share gains in key markets and longer treatment duration are contributing to the drug’s growth. Celgene is also currently working on label expansion of drugs like Pomalyst/Imnovid, Abraxane and Otezla among others, which is encouraging.
On the second-quarter call, investors are expected to gain more visibility on the company’s performance and label-expansion efforts, along with updates on the pipeline front.(Read more:Celgene Q2 Earnings: Disappointment in Store?).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>