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Can Sanofi (SNY) Keep the Beat Streak Alive in Q4 Earnings?

We expect Sanofi SNY to beat expectations when it reports fourth-quarter and full-year 2022 results on Feb 3, before market open. In the last reported quarter, the company beat earnings expectations by 9.85%.

This large drugmaker’s performance beat earnings expectations in each of the trailing four quarters. The company delivered a four-quarter earnings surprise of 9.50%, on average.

Sanofi Price, Consensus and EPS Surprise

Sanofi Price, Consensus and EPS Surprise
Sanofi Price, Consensus and EPS Surprise




Sanofi price-consensus-eps-surprise-chart | Sanofi Quote

Sanofi’s stock has declined 6.6% in the past year compared with an increase of 9.8% for the industry.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Factors to Consider

Sanofi’s top-line growth is likely to have been driven by higher sales of the Specialty Care business, mainly its blockbuster drug Dupixent.

Dupixent sales in the quarter are likely to have been driven by robust growth in all markets and new indications. In the United States, sales are expected to have been driven by strong demand for its approved indications, atopic dermatitis, asthma and chronic rhinosinusitis with nasal polyposis indications and a rapid uptake in the new indication of eosinophilic esophagitis.

Dupixent was approved for its fifth disease indication in the United States, prurigo nodularis, in September, which is likely to have contributed to fourth-quarter sales.

Please note that Sanofi markets Dupixent in partnership with Regeneron REGN. In addition to the currently approved indications, Sanofi and Regeneron are studying Dupixent in a broad range of diseases driven by type 2 inflammation or other allergic processes in late-stage studies. Our estimates for Dupixent stand at €2.35 billion.

Sales of Sanofi’s rare disease and rare blood disorders and oncology drugs (excluding Libtayo) are likely to have increased in the fourth quarter. Our estimates for rare disease, rare blood disorders and oncology drugs are €907.5 million, €354.1 million and €242.0 million, respectively.

However, sales are expected to have declined slightly in the immunology and neurology franchise in the fourth quarter. In the General Medicines unit, the growth of core drugs (like Multaq, Toujeo, Praluent and Rezurock) is likely to have been offset by lower sales of non-core drugs (like Lantus and Aprovel).

In Vaccines, higher sales of flu vaccines and a recovery in demand for travel and booster vaccines are likely to have benefited the unit’s sales performance. Our estimate for Vaccines is €1.77 billion.

In CHC, a strong sales performance is expected in the Digestive Wellness and Cough & Cold categories. Our estimates for the CHC unit is €1.22 billion

However, the company expects gross margins to be lower in the fourth quarter as underlying improvements are expected to be offset by macroeconomic headwinds such as increased cost of energy, transportation, as well as labor costs.

Please note that several of Sanofi’s products, the RSV vaccine, Beyfortus (nirsevimab), the COVID-19 vaccine called VidPrevtyn Beta, Enjaymo (sutimlimab) for hemolytic anemia in patients with cold agglutinin disease and Dupixent for prurigo nodularis were approved in Europe in the fourth quarter. These approvals are expected to have contributed, though minimally, to sales in the fourth quarter.

Earnings Whispers

Our proven model predicts an earnings beat for Sanofi in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.

Earnings ESP: Sanofi’s Earnings ESP is +2.49% as the Most Accurate Estimate of 93 cents is higher than the Zacks Consensus Estimate of 90 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Sanofi has a Zacks Rank #2

Other Stocks to Consider

Here are some drug stocks that also have the right combination of elements to beat on earnings this time around:

Novartis NVS has an Earnings ESP of +1.03% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Novartis’ stock has risen 3.1% in the past year. Novartis missed earnings estimates in one of the last four quarters while beating in the other three. Novartis has a positive four-quarter earnings surprise of 0.64%, on average. NVS is scheduled to release its fourth-quarter 2022 results on Feb 1.

Novo Nordisk NVO has an Earnings ESP of +12.81% and a Zacks Rank #2.

Novo Nordisk’s stock has risen 39.2% in the past year. Novo Nordisk topped earnings estimates in three of the last four quarters and has a four-quarter earnings surprise of 3.0 9%, on average. NVO is scheduled to release its fourth-quarter results on Feb 1.

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

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Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report

Sanofi (SNY) : Free Stock Analysis Report

Novartis AG (NVS) : Free Stock Analysis Report

Novo Nordisk A/S (NVO) : Free Stock Analysis Report

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