Will Alexion's (ALXN) Soliris Drive Q1 Earnings Beat? - Analyst Blog
Alexion Pharmaceuticals, Inc. ALXN is scheduled to report first-quarter 2015 earnings results on Apr 23, before the opening bell.
The company has posted positive earnings surprises in two of the trailing four quarters. Let’s see how things are shaping up for this announcement.
Soliris Could Drive Q1 Results
Soliris, Alexion’s sole marketed product, is expected to continue performing well for its approved indications – paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome – thereby driving top-line growth. The company is expected to add new patients in the U.S., Europe and Japan.
Increased operating costs will however hurt the bottom line in the first quarter. While research & development costs are expected to increase due to the company’s efforts to develop its pipeline, selling, general and administrative expenses should increase on Alexion’s efforts to expand. Meanwhile, the first quarter is likely to witness foreign exchange headwinds.
Though increased operating costs are expected to hurt Alexion’s bottom line in the first quarter, the long-term growth prospects are encouraging. The successful development and subsequent commercialization of the pipeline will not only boost the company’s top line but also reduce its dependence on a single product for growth.
We believe that investor focus will remain on updates on the performance of Soliris. Investors are also looking forward to updates on the company’s 2015 outlook.
What Our Model Indicates
Our proven model does not conclusively shows that Alexion is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to likely post an earnings beat. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +4.24%.
Zacks Rank: Alexion currently carries a Zacks Rank #4 (Sell). We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.
Stocks That Warrant a Look
Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
ImmunoGen, Inc. IMGN has an Earnings ESP of +32% and carries a Zacks Rank #3. It is scheduled to report results on Apr 24.
The Earnings ESP for Biogen BIIB is +0.51% and it sports a Zacks Rank #1. The company is also scheduled to release results on Apr 24.
AbbVie Inc. ABBV has an Earnings ESP of +1.19% and carries a Zacks Rank #3. It is scheduled to report results on Apr 23.
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