On Nov 8, 2013, Zacks Investment Research upgraded Jazz Pharmaceuticals (JAZZ) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Jazz Pharma has been witnessing rising earnings estimates on the back of strong third quarter 2013 results. Moreover, this specialty biopharmaceutical company delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 3.93%. The long-term expected earnings growth rate for this stock is 25.3%
Jazz Pharma reported third quarter 2013 results on Nov 5. Adjusted earnings of $1.66 per share were well above the Zacks Consensus Estimate of $1.52 and the year-ago adjusted earnings of $1.22 per share. Including stock-based compensation expense and depreciation, earnings were $1.61 per share. Investors reacted positively to the news. Overall, the stock gained 6.1% since the announcement.
Earnings were primarily aided by solid top-line growth of 32.3% driven by strong sales of Xyrem (narcolepsy) and Erwinaze (oncology).
Based on its progress, the company raised the low end of its earnings per share projection to $6.30 to $6.40 per share (previous guidance: $6.20 to $6.40). Jazz Pharma tweaked its revenue guidance to $867–$877 million from $860–$880 million expected earlier.
The Zacks Consensus Estimate for 2013 increased 10 cents to $5.77 per share as several firms raised their estimates over the last 7 days. For 2014, estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 43 cents to $7.78 per share.
Other Stocks to Consider
Other companies in the pharma space with a favorable Zacks Rank are AMAG Pharmaceuticals, Inc. (AMAG), Pharmacyclics Inc. (PCYC) and Osiris Therapeutics, Inc. (OSIR). All these stocks also carry a Zacks Rank #1.