Per the Earnings Trends report of Jul 29, 35.2% of the companies in the Medical sector, constituting nearly 52% of the sector’s market capitalization, have already reported earnings. While 84.2% beat earnings estimates, 89.5% beat the same for sales. Earnings are up 5.6% year over year while revenues are up 5.5%. Overall, second-quarter earnings for the Medical sector, comprising pharma/biotech and medical device companies, are expected to be down 3% while sales are expected to be up 1.9%.
Several large biotech and drugmakers reported their results last week. Pfizer, Lilly, Sanofi and Merck reported mixed results, beating estimates for earnings while missing the same for sales. Pfizer and Merck raised their guidance for both earnings and sales for 2020. Lilly raised its earnings expectations for the year while keeping its sales guidance intact. While Glaxo and Gilead missed estimates on both counts, AstraZeneca and Vertex beat estimates for both earnings and sales.
Let’s analyze five drug/biotech companies that are set to report second-quarter 2020 results on Aug 5.
Regeneron Pharmaceuticals REGN
Regeneron has an impressive track record. It surpassed earnings estimates by 10.08%, on average, in the last four quarters.
Regeneron Pharmaceuticals, Inc. Price and EPS Surprise
Regeneron Pharmaceuticals, Inc. price-eps-surprise | Regeneron Pharmaceuticals, Inc. Quote
Regeneron has an Earnings ESP of -3.68% and a Zacks Rank #4 (Sell).
Per our proven model, stocks with the combination of a positive earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for earnings stands at $6.23 per share.
Sales of Regeneron’s key drug, Eylea, are likely to be have been strong in the second quarter. Apart from Eylea, investors will be focusing on Dupixent’s (sales are recorded by Sanofi) performance and label expansion, which has been the primary growth driver in the last few quarters.
Moderna, Inc. MRNA
This biotech’s earnings beat the Zacks Consensus Estimate in each of the last four quarters with the average surprise being 8.92%.
This #2 Ranked company has an Earnings ESP of -0.93%. The Zacks Consensus Estimate stands at a loss of 36 cents per share. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company has been actively engaged in developing its coronavirus vaccine — mRNA-1273. It is one of the leading players in this field with phase III study initiated recently. Investors will likely focus on updates on mRNA-1273 on the second-quarter conference call.
Sarepta Therapeutics SRPT
The company’s earnings beat estimates only once in the last four quarters while missing in the other three, resulting in four-quarter average negative surprise of 63.97%.
Sarepta Therapeutics, Inc. Price and EPS Surprise
Sarepta Therapeutics, Inc. price-eps-surprise | Sarepta Therapeutics, Inc. Quote
Sarepta has an Earnings ESP of -2.53% and a Zacks Rank #4.
The Zacks Consensus Estimate for stands at a loss of $1.73 per share.
Product revenues are expected to have risen year over year driven by Sarepta’s Duchenne muscular dystrophy (DMD) drug, Exondys 51. The FDA granted accelerated approval to Sarepta’s second DMD drug, Vyondys 53, in December 2019. However, patient initiation on the drug is expected to have been affected due to COVID-19 in the second quarter.
ACADIA Pharmaceuticals ACAD
The company has a good track record, delivering an earnings beat in three of the trailing four quarters while missing in one. The four-quarter earnings surprise was 7.72%, on average
ACADIA Pharmaceuticals Inc. Price and EPS Surprise
ACADIA Pharmaceuticals Inc. price-eps-surprise | ACADIA Pharmaceuticals Inc. Quote
ACADIA has an Earnings ESP of +4.23% and a Zacks Rank #3, indicating a likely earnings beat.
The Zacks Consensus Estimate stands at a loss of 44 cents per share.
Investors will be keen to know if COVID-19 had any impact on sales of ACADIA’s sole marketed drug, Nuplazid, when it reports results.
Horizon Therapeutics Public Limited Company HZNP
The company’s earnings beat estimates in each of the past four quarters with the average surprise being 43.99%.
Horizon Therapeutics Public Limited Company Price and EPS Surprise
Horizon Therapeutics Public Limited Company price-eps-surprise | Horizon Therapeutics Public Limited Company Quote
Horizon Therapeutics has an Earnings ESP of 0.00% and a Zacks Rank #1 The Zacks Consensus Estimate for earnings stands at 39 cents.
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