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Drug/Biotech Stock Q1 Earnings Due on May 6: ZTS, ALXN & More

Kinjel Shah

There are a host of Medical sector releases lined up for this week. The sector comprises pharma/biotech and medical device companies.

Per the Earnings Trends report of Apr 30, 36.5% of the companies in the Medical sector, constituting nearly 58.5% of the sector’s market capitalization, reported earnings. While 73.7% of the companies that have reported beat earnings estimates, 68.4% beat on sales. Earnings are up 16.8% year over year on 9.9% higher revenues. Overall, first-quarter earnings and sales growth for the Medical sector is expected to be 4.5% and 8.3%, respectively.

Most of the large drug and biotech companies that have reported so far beat first-quarter estimates for both earnings and sales. Most companies benefitted from stockpiling of consumer healthcare products and medicines by consumers/patients/distributors amid coronavirus-led lockdown. Sales of drugs/medicines that require significant physician office or institutional visits were hurt in the quarter, while oral and self-administered medicines and consumer products benefited from stockpiling.

Most companies maintained their financial guidance for the year with J&J JNJ and Merck MRK being exceptions. Both lowered their financial outlooks.

Let’s analyze five drug/biotech companies that are set to report first-quarter 2020 results on May 6.

Zoetis ZTS

This Florham Park, NJ-based animal health company has an excellent earnings surprise history, having surpassed expectations in each of the trailing four quarters, with the average being 7.83%. In the last reported quarter, the company delivered a positive surprise of 4.55%

Zoetis has an Earnings ESP of -0.05% and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for earnings stands at 87 cents per share.

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1, 2 (Buy) or 3 increases the odds of an earnings beat.  You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Solid sales from the dermatology portfolio and companion animal business likely to have offset weaker sales in the livestock products unit in the first quarter. Meanwhile, investor focus is likely to be on the impact of the coronavirus outbreak on Zoetis’ performance when it reports first-quarter results.

Alexion Pharmaceuticals ALXN

This New Haven, CT, drugmaker for ultra-rare disorders, has an Earnings ESP of +1.08% and a Zacks Rank #2. The Zacks Consensus Estimate for the first quarter is pegged at $2.70 per share.

Alexion’s earnings performance has been encouraging with the company delivering a positive surprise in all the trailing four quarters, with the average being 9.12%.

Alexion’s key growth driver Soliris is likely to have witnessed higher salesdriven by solid demand for its approved indication. Other drugs like Strensiq and Kanuma are likely to have performed well.

Alnylam Pharmaceuticals ALNY

This Cambridge, MA-based biotech focused on the development of novel therapeutics based on RNA interference (RNAi) has an Earnings ESP of +4.44% and a Zacks Rank of 3. The Zacks Consensus Estimate for the first quarter is pegged at a loss of $1.89 per share. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alnylam beat estimates in two of the last four quarters while missing in the remaining two, with the average positive surprise being 5.87%.

Allogene Therapeutics. ALLO

This South San Francisco, CA-based development stage biotech has an Earnings ESP of +2.44% and is #2 Ranked. The Zacks Consensus Estimate for the first quarter is a loss of 57 cents per share.

Allogene’s earnings beat expectations in each of the last four quarters with the average positive surprise being 14.52%.

Horizon Therapeutics Public Limited Company HZNP

This Dublin, Ireland-based drugmaker has an Earnings ESP of +2.90% and a Zacks Rank of 3. The Zacks Consensus Estimate for the first quarter is pegged at 23 cents per share.

Horizon Therapeutics beat estimates in each of the trailing four quarters, with the average positive surprise being 71.17%.

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Johnson & Johnson (JNJ) : Free Stock Analysis Report
 
Alexion Pharmaceuticals, Inc. (ALXN) : Free Stock Analysis Report
 
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
 
Alnylam Pharmaceuticals, Inc. (ALNY) : Free Stock Analysis Report
 
Zoetis Inc. (ZTS) : Free Stock Analysis Report
 
Horizon Therapeutics Public Limited Company (HZNP) : Free Stock Analysis Report
 
Allogene Therapeutics, Inc. (ALLO) : Free Stock Analysis Report
 
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