For Immediate Release
Chicago, IL – January 24, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Celgene Corp. CELG, Regeneron Pharmaceuticals Inc. REGN, Amgen Inc. AMGN, Alnylam Pharmaceuticals Inc. ALNY and bluebird bio, Inc. BLUE.
Here are highlights from Wednesday’s Analyst Blog:
5 Best Biotech Bets Likely to Outperform Estimates in Q4
The Medical-Biomedical and Genetics sector is off to a flying start in 2019. The sector includes large as well as small biotech companies. Merger and acquisition (M&A) activity is gaining momentum with the new tax reform in place, which is obviously a boon to any sector. Pharma giant Bristol-Myers Squibb announced that it will acquire biotech Celgene in a cash and stock transaction with an equity value of approximately $74 billion. This was soon followed by the Eli Lilly’s announcement to acquire small biotech, Loxo Oncology for $235.00 per share in cash or approximately $8.0 billion.
The sector has however, underperformed the S&P 500. The biotech industry has declined 22.9% compared with the S&P 500 decrease of 5.4%, probably because of some pipeline setbacks faced by the industry.
Rising demand for new products, rampant innovation and product line extensions, strong clinical study results plus frequent FDA approvals keep this sector on the growth track. There were quite a few key approvals in 2018 which include Gilead Sciences’ HIV regimen, Biktarvy; Vertex Pharmaceuticals’ Symdeko (tezacaftor/ivacaftor and ivacaftor) for the treatment of cystic fibrosis (CF); Amgen’s Aimoviq for addressing migraine; Regeneron Pharmaceuticals’ Libtayo and BioMarin’s Palynziq for treating phenylketonuria et al. Such nods should boost the respective companies’ top lines as a few are struggling with sales decline of legacy drugs.
Meanwhile, government scrutiny of high drug prices, pricing and competitive pressure, slowdown in sales of some of the most high-profile older drugs and major pipeline setbacks act as deterrents to growth.
We believe that pipeline success, cost-cutting, share buybacks, product launches, increased M&A and collaboration activity plus appropriate utilization of cash should favor the drug/biotech sector.
How to Pick Probable Q4 Winners?
There are multiple drug/biotech companies poised to beat on fourth-quarter earnings. However, given the large number of drug/biotech firms, the task of selecting stocks with possibilities to surpass expectations could appear quite daunting.
With the help of the Zacks Stock Screener, we have zeroed in on five drug/ biotech stocks that carry a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP. It is a valuable tool for investors looking for stocks with the maximum potential to beat estimates. Our research shows that with this combination, chances of a positive surprise are as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
5 Stocks Set to Surpass Mark
Celgene Corp. has an Earnings ESP of +2.31% and a Zacks Rank of 1. The Zacks Consensus Estimate for fourth-quarter 2018 is pegged at $2.32. The company has a trailing four-quarter average positive surprise of 2.54%. It is expected to report on Jan 24. You can see the complete list of today’s Zacks #1 Rank stocks here.
Regeneron Pharmaceuticals Inc. has an Earnings ESP of +6.12% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2018 earnings stands at $5.68. The company’s earnings topped estimates in the last four reported quarters, the average being 10.97%. The company is slated to release earnings on Feb 14, before the market opens.
Amgen Inc.has an Earnings ESP of +0.25% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2018 is projected at $3.26. The company’s earnings trumped estimates in three of the preceding four reported quarters, the average earnings surprise being 4.80%. It is scheduled to announce earnings numbers on Jan 29 after market close.
Alnylam Pharmaceuticals Inc. has an Earnings ESP of +1.65% and is a Zacks #3 Ranked player. The consensus estimate for fourth-quarter bottom line is pegged at a loss of $1.97. The company is anticipated to report earnings on Feb 14.
bluebird bio, Inc. has an Earnings ESP of +5.87% and is a #3 Ranked stock. The consensus mark for the fourth quarter stands at a loss of $2.78. The company will announce results on Feb 20.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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