U.S. Markets closed

Pharma/Biotech Stocks' Q1 Earnings Queued for Apr 29: MRK, BMY & More

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·6 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

The first-quarter 2021 earnings season is in full swing this week. More than 800 companies are scheduled to report results this week (including 180 S&P 500 members), with some of them already having reported in the last couple of days. Per the latest data, as of Apr 23, results from 123 S&P 500 members (24.6% of the index’s total membership) were out and data showed that total earnings for these companies were up 46.7% year over year on 5.1% higher revenues. Among these, 83.7% beat on earnings and 75.6% beat on revenues.

The Medical sector, comprising pharma/biotech and medical device companies, has posted mixed results so far. Quite a few pharma/biotech giants have reported results. Among these, bellwether Johnson & Johnson JNJ beat on both sales and earnings, while Novartis NVS missed on both counts due to the ongoing pandemic. Eli Lilly’s results were dismal and it missed earnings and sale estimates. Among the biotech companies, Biogen BIIB beat on earnings and sales in the first quarter of 2021 but sales were down year over year, while Amgen missed on both counts.

Nevertheless, earnings and sales for the Medical sector are projected to grow 20.8% and 10.3%, respectively, for the quarter to be reported.

Let us see what is in store for companies that are set to report first-quarter 2021 results on Apr 29.

Merck MRK

Merck’s performance has been mixed, with earnings beating estimates in three of the trailing four quarters while missing in one. The company has a four-quarter earnings surprise of 11.5%, on average.

Growth in the first quarter has most likely been boosted by strong demand for oncology drugs. However, Merck expects some residual negative impacts of COVID-19 on sales of some key products, mainly vaccines, in the quarter to be reported. Overall, reduced wellness visits and delayed procedures due to the pandemic, and generic competition for legacy drugs are expected to have partially offset the growth.

Per our proven model, 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

While Merck currently carries a Zacks Rank #3, it has an Earnings ESP of -2.71%. The Zacks Consensus Estimate for earnings currently stands at $1.62 per share. You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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

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

Bristol-Myers BMY

Bristol-Myers has an excellent track record, beating earnings estimates in the last four quarters. The company delivered an earnings surprise of 6.57%, on average, in the trailing four quarters. In the last reported quarter, the company delivered an earnings surprise of 10.96%.

Growth in the first quarter has likely been fueled by strong demand for multiple myeloma (MM) drug, Revlimid (added with erstwhile Celgene’s acquisition), and blood thinner drug, Eliquis. Immuno-oncology drug, Opdivo, revived in the previous quarter and registered growth. Label expansions in recent months have most likely boosted sales of Opdivo, which is approved for multiple cancer indications. The top line is likely to have got a boost from the incremental contributions of Reblozyl, Inrebic and Zeposia.

While Bristol-Myers currently carries a Zacks Rank #2, it has an Earnings ESP of -1.74%. The Zacks Consensus Estimate for earnings currently stands at $1.83 per share.

Bristol Myers Squibb Company Price, Consensus and EPS Surprise

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

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

Vertex Pharmaceuticals VRTX

Vertex’s earnings surprise record is mixed as it beat on earnings in three of the trailing four quarters and missed in one, the average surprise being 16.90%. In the last reported quarter, it delivered a negative earnings surprise of 5.28%.

Rapid uptake of the company’s newest cystic fibrosis (“CF”) medicine, Trikafta, has most likely propelled growth in the quarter. However, Vertex’s other CF drugs and their existing combinations, namely Kalydeco, Orkambi and Symdeko/Symkevi, are likely to have witnessed a decline in sales due to strong uptake of Trikafta.

While Vertex currently carries a Zacks Rank #4 (Sell), it has an Earnings ESP of +0.48%. The Zacks Consensus Estimate for earnings currently stands at $2.77 per share.

Vertex Pharmaceuticals Incorporated Price, Consensus and EPS Surprise

Vertex Pharmaceuticals Incorporated Price, Consensus and EPS Surprise
Vertex Pharmaceuticals Incorporated Price, Consensus and EPS Surprise

Vertex Pharmaceuticals Incorporated price-consensus-eps-surprise-chart | Vertex Pharmaceuticals Incorporated Quote

Gilead Sciences, Inc. GILD

Gilead has a mixed track record, with earnings missing estimates in one of the last four quarters and beating in the remaining three, the average negative surprise being 0.12%. In the last reported quarter, the company beat expectations by 1.86%.

Gilead has shifted focus to the HIV franchise and newer avenues like CAR-T therapy due to a massive decline in HCV franchise sales. The HIV franchise maintained the momentum in the previous quarter and it is expected to have continued in the to-be-reported quarter on the strong uptake of Biktarvy. Moreover, increased demand for Veklury (remdesivir) for the treatment of COVID-19 patients is likely to have boosted the top line.

Per our proven model, Gilead is likely to report an earnings beat, as it currently has a Zacks Rank #3 and an Earnings ESP of +3.79%. The Zacks Consensus Estimate for earnings currently stands at $2.06 per share.

Gilead Sciences, Inc. Price, Consensus and EPS Surprise

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

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

"Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>


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

Biogen Inc. (BIIB) : Free Stock Analysis Report

Johnson & Johnson (JNJ) : Free Stock Analysis Report

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

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

Novartis AG (NVS) : Free Stock Analysis Report

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

Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report

To read this article on Zacks.com click here.