Per the Earnings Trends report as of Aug 5, 79.6% of the companies in the Medical sector, constituting nearly 84.3% of the sector’s market capitalization, have already reported earnings. While 86% beat earnings estimates, 79.1% beat the same for sales. Earnings are up 4.4% year over year while revenues are up 4%. Overall, second-quarter earnings for the Medical sector, comprising pharma/biotech and medical device companies, are expected to rise 1.9% on 3.4% sales increase.
It has been a mixed second-quarter earnings season for the drug/biotech stocks so far. Most companies beat estimates for earnings while missing the same for sales. However, AstraZeneca, Regeneron, Bristol-Myers, Vertex Pharmaceuticals and AbbVie beat estimates on both counts. As expected, almost all companies witnessed a significant negative impact on their top line due to business disruption and reduced doctor visits in the United States amid COVID-19-related mobility restrictions & limitations. Meanwhile, coronavirus-related stockpiling benefits, which increased sales of several medicines in the first quarter, reversed in the second quarter and hurt sales. Lower selling, general and administrative costs due to COVID-19 related restrictions on travel and promotional activities gave a boost to earnings.
Let’s analyze five drug/biotech companies that are set to report second-quarter 2020 results on Aug 10.
Novavax NVAX
Novavax missed earnings estimates thrice in the last four quarter while beating in one with the average surprise being 0.71%.
Novavax has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per our proven model, stocks with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 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 a loss of 37 cents per share.
Investors will be keen to know about the progress of Novavax’s coronavirus vaccine candidate, NVX-CoV2373 when the company reports results.
Intercept Pharmaceuticals ICPT
This New York-based biotech has an Earnings ESP of +10.76% and a Zacks Rank of 3, indicating a likely positive surprise. The Zacks Consensus Estimate for the second quarter is pegged at a loss of $2.88 per share.
In the trailing four quarters, Intercept beat estimates in two quarters and missed in the other two with the average negative earnings surprise being 3.78%.
Intercept Pharmaceuticals, Inc. Price and EPS Surprise
Intercept Pharmaceuticals, Inc. price-eps-surprise | Intercept Pharmaceuticals, Inc. Quote
Reata Pharmaceuticals RETA
The biotech’s earnings beat the Zacks Consensus Estimate in two of the last four quarters while missing in the other two with the average earnings surprise being 12.83%.
Reata Pharmaceuticals, Inc. Price and EPS Surprise
Reata Pharmaceuticals, Inc. price-eps-surprise | Reata Pharmaceuticals, Inc. Quote
This Zacks Rank #4 (Sell) company has an Earnings ESP of 0.00%. The Zacks Consensus Estimate stands at a loss of $2.22 per share.
Halozyme Therapeutics HALO
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 earnings surprise of 83.46%.
Halozyme Therapeutics, Inc. Price and EPS Surprise
Halozyme Therapeutics, Inc. price-eps-surprise | Halozyme Therapeutics, Inc. Quote
Halozyme has an Earnings ESP of 0.00% and a Zacks Rank #2.
The Zacks Consensus Estimate for earnings stands at 25 cents per share.
Amicus Therapeutic FOLD
In the trailing four quarters, the company delivered an earnings beat once, missed estimates in two quarters and posted in-line results in another. The four-quarter negative earnings surprise is 8.66%, on average
Amicus has an Earnings ESP of -5.19% and a Zacks Rank #5.
The Zacks Consensus Estimate stands at a loss of 26 cents per share
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