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What's in Store for These 5 Pharma Bigwigs in Q1 Earnings?

The first-quarter 2024 reporting cycle of the Medical sector is about to pick up pace this week. The sector mainly comprises pharma/biotech and medical device companies.

The earnings season for the drug and biotech sector kicked off last week when bellwether Johnson & Johnson reported mixed first-quarter results as it beat estimates for earnings but missed the same for sales.

Yesterday, Swiss pharma giant Novartis AG reported better-than-expected first-quarter financial results, as its earnings and sales both beat estimates. Novartis increased its revenue and operating income growth guidance for 2024.

Per the Earnings Trends report, as of Apr 17, 5% of the companies in the Medical sector — representing 19.4% of the sector’s market capitalization — reported quarterly earnings. Of these, 100% outperformed on earnings, while 66.7% beat revenue estimates. Earnings decreased 0.3% year over year, while revenues increased 3.7%. Overall, first-quarter earnings of the Medical sector are expected to decline 5.6%, while sales are expected to rise 6.1% from the year-ago quarter.

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Merck MRK, Sanofi SNY and Bristol Myers BMY are scheduled to release their respective first-quarter earnings reports before the opening bell on Apr 25, while Gilead Sciences GILD will share its quarterly results after the market closes on the same day. The following day, i.e., on Apr 26, AbbVie ABBV is slated to release its first-quarter results before the market opens.

Let’s see how these biotech/pharma companies are likely to have performed in the soon-to-be-reported quarter.

Merck

Merck has an encouraging earnings track record. It beat earnings estimates in each of the last four quarters, delivering an average earnings surprise of 38.17%. In the last reported quarter, MRK beat earnings estimates by 133.33%.

Per our proven model, companies 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.

For the quarter to be reported, Merck has an Earnings ESP of -1.36% and a Zacks Rank #3. The Zacks Consensus Estimate for Merck’s earnings is pegged at $1.98 per share.You can see the complete list of today’s Zacks #1 Rank stocks here.

Strong global underlying demand across Merck’s business, particularly for cancer drug Keytruda and HPV vaccine, Gardasil, is likely to have boosted sales growth in the first quarter like several previous quarters.

Merck & Co., Inc. Price and EPS Surprise

Merck & Co., Inc. Price and EPS Surprise
Merck & Co., Inc. Price and EPS Surprise

Merck & Co., Inc. price-eps-surprise | Merck & Co., Inc. Quote

Sanofi

Sanofi has a mixed earnings record history so far. It beat earnings estimates in three of the last four quarters, missing the mark on one occasion, delivering an average earnings surprise of 2.39%. In the last reported quarter, SNY missed earnings estimates by 5.32%.

For the quarter to be reported, Sanofi has an Earnings ESP of -3.09% and a Zacks Rank #4 (Sell). The Zacks Consensus Estimate for Sanofi’s earnings is pegged at 97 cents per share.

In the upcoming earnings release, SNY’s revenues have likely been driven by higher sales of Dupixent and contributions from new products like AstraZeneca-partnered Beyfortus and Altuviiio. Additionally, the company’s vaccine sales have also likely increased. However, the impact of generic competition on Aubagio sales in all key markets and lower sales from mature products in the General Medicines segment are likely to have hurt sales.

Sanofi Price and EPS Surprise

Sanofi Price and EPS Surprise
Sanofi Price and EPS Surprise

Sanofi price-eps-surprise | Sanofi Quote

Bristol Myers

Bristol Myers has a mixed earnings track record. BMY’s earnings beat estimates in three of the trailing four quarters, missing the mark on one occasion, delivering an average surprise of 4.24%. In the last reported quarter, Bristol Myers’ earnings surpassed estimates by 11.84%.

For the quarter to be reported, Bristol Myers has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate for the company’s earnings is pegged at a loss of $4.51 per share.

Bristol Myers’ revenues in the first quarter of 2024 are likely to have been boosted by the sales growth of key products like Opdivo, Eliquis, Pomalyst and Yervoy. BMY’s newer products like Reblozyl, Breyanzi, Zeposia and Opdualag are likely to have also contributed to the top line.

Bristol Myers Squibb Company Price and EPS Surprise

Bristol Myers Squibb Company Price and EPS Surprise
Bristol Myers Squibb Company Price and EPS Surprise

Bristol Myers Squibb Company price-eps-surprise | Bristol Myers Squibb Company Quote

Gilead Sciences

Gilead also has a mixed earnings track record so far. It beat earnings estimates in one of the last four quarters, missing the mark on the other three occasions, delivering an average negative surprise of 3.64%. In the last reported quarter, GILD missed earnings estimates by 2.27%.

For the quarter to be reported, Gilead has an Earnings ESP of -134.13% and a Zacks Rank #3. The Zacks Consensus Estimate for its earnings is pegged at 71 cents per share.

Gilead’s flagship HIV therapies — Biktarvy and Descovy — are likely to have boosted the company’s top line. However, the reset of patient copays and deductibles in the first quarter also typically impacts the company’s revenues. In addition, inventory build-up in the fourth quarter leads to notable draw-downs by wholesalers in the first quarter, thereby hurting revenues.

Gilead Sciences, Inc. Price and EPS Surprise

Gilead Sciences, Inc. Price and EPS Surprise
Gilead Sciences, Inc. Price and EPS Surprise

Gilead Sciences, Inc. price-eps-surprise | Gilead Sciences, Inc. Quote

AbbVie

AbbVie has an impeccable earnings track record to date. ABBV’s earnings beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 2.34%. In the last reported quarter, AbbVie’s earnings beat estimates by 1.09%.

For the quarter to be reported, AbbVie has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate is pegged at $2.26 per share.

AbbVie’s top line is expected to have been driven by sales of new immunology drugs, Skyrizi and Rinvoq, which registered strong growth in the past few quarters, mainly due to approvals in new indications.

 

AbbVie Inc. Price and EPS Surprise

AbbVie Inc. Price and EPS Surprise
AbbVie Inc. Price and EPS Surprise

AbbVie Inc. price-eps-surprise | AbbVie Inc. Quote

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Sanofi (SNY) : Free Stock Analysis Report

Bristol Myers Squibb Company (BMY) : Free Stock Analysis Report

Merck & Co., Inc. (MRK) : Free Stock Analysis Report

Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report

AbbVie Inc. (ABBV) : Free Stock Analysis Report

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