U.S. Markets closed

Factors Setting the Tone for Celgene (CELG) Q3 Earnings

Zacks Equity Research

Celgene Corporation CELG is scheduled to report third-quarter 2019 results on Oct 31. The company's earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, with average positive surprise of 4.21%. In the last reported quarter, it delivered a positive earnings surprise of 9.16%.

Let's see how things are shaping up ahead of this announcement.

Celgene Corporation Price, Consensus and EPS Surprise

 

Celgene Corporation Price, Consensus and EPS Surprise

Celgene Corporation price-consensus-eps-surprise-chart | Celgene Corporation Quote

Factors at Play

Celgene’s key product, Revlimid, was a major growth driver in the second quarter, backed by the adoption of the triplet therapy for myeloma leading to market share gains, a trend that most likely continued in the third quarter. Revlimid, an oral, immunomodulatory drug, is currently approved for several indications, including the newly-diagnosed multiple myeloma ("MM"), myelodysplastic syndromes and mantle cell lymphoma.  

In May, the European Commission approved the drug in combination with Velcade and dexamethasone (RVd) for the treatment of adult patients with previously-untreated MM, who are not eligible for transplant. Also, the FDA approved the drug in combination with a rituximab product for the treatment of adult patients with previously-treated follicular lymphoma or marginal zone lymphoma. Sales might have got further boost as this was the first full quarter to benefit from the label expansion of the drug into these indications.

Psoriasis drug, Otezla, has driven growth for Celgene in the first half of the year on higher demand and is likely to have contributed significantly to the company’s top line in the third quarter.

In addition to Revlimid and Otezla, Pomalyst and Abraxane might have boosted the top line.

Apart from the regular top and bottom-line numbers, investors will focus on pipeline updates from the company. In August, the FDA approved Inrebic (fedratinib) for the treatment of adult patients with intermediate-2 or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis.

Business Update

Celgene has been in news for its impending merger with Bristol-Myers Squibb Company BMY. In January, Bristol-Myers had announced that it will acquire Celgene for approximately $74 billion. In April, the stockholders of Celgene voted in favor of the proposed merger.

Share Price Performance

Celgene’s stock has surged 63.4% in the year so far against a 2.8% decline for the industry.

 

Earnings Whisper

Our proven model does not conclusively predict an earnings beat for Celgene this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for Celgene is +3.06% as the Zacks Consensus Estimate is $2.73 and the Most Accurate Estimate is $2.81.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Incyte Corporation INCY has an Earnings ESP of +1.15% and a Zacks Rank of 1. It is scheduled to release earnings on Oct 29. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vertex Pharmaceuticals VRTX has an Earnings ESP of +3.07% and a Zacks Rank of 1. The company is scheduled to release earnings on Oct 30.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Bristol-Myers Squibb Company (BMY) : Free Stock Analysis Report
 
Incyte Corporation (INCY) : Free Stock Analysis Report
 
Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
 
Celgene Corporation (CELG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.