4 Pharma Stocks Set to Deliver Earnings
After enduring the biggest patent cliffs in recent times, the
pharmaceutical industry has been slowly recovering with the effect
of the genericization of a number of major drugs gradually fading.
Though the major patent expiries are over, the industry will
continue to witness a few more in the near to mid-term.
However, new products are expected to support top line going
forward. This, along with increased pipeline visibility and smart
utilization of cash, should increase confidence in the sector.
Meanwhile, a flurry of restructuring activities has been witnessed
in the sector. In order to offset the adverse effects of
genericization, a number of companies have adopted different
cost-cutting measures including layoffs and the divesture of
non-core business segments. This should further help the industry
regain its footing.
Given this scenario, it might be a good idea to zero in on a
handful of pharma stocks that are poised to beat earnings estimates
this quarter. An earnings beat should help these stocks gain
investors' confidence and show price improvement.
How to Pick the Right Stocks?
Given a number of industry participants,
finding the right stocks that have the potential to beat earnings
estimates could appear to be a difficult task, but our proprietary
methodology makes it fairly simple.
picking stocks that have a combination of a favorable Zacks Rank -
Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) - and a positive
Earnings ESP is our proprietary methodology for determining which
stocks have the best chance to surprise in their next earnings
announcement. It shows the percentage difference between the Most
Accurate Estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this combination, the
chance of a positive earnings surprise is as high as 70%.
Below are four pharma stocks we believe are best positioned to
receive a strong boost once they announce earnings in the coming
) is a Zacks Rank #3 (Hold) stock with an earnings ESP of +6.1%.
The Zacks Consensus Estimate for the third quarter is $1.64. In the
past 7 days, estimates (on an average) have inched up by a penny.
Dublin-based Shire is a specialty biopharmaceutical company
catering to diverse medical needs through research and development,
manufacture, sale, and distribution of pharmaceutical products.
Shire is well placed in the attention deficit hyperactive disorder
(ADHD) market, thanks to key drug Vyvanse, which is now being
developed for additional indications as well. Shire's recent focus
on expansion in additional geographies like China, Brazil and Japan
is also encouraging.
The company has registered an average earnings surprise of 1.17%
over the trailing twelve months.
is expected to report its third-quarter 2013 results before the
opening bell on Oct 24.
BioMarin Pharmaceutical Inc.
) carries a Zacks Rank #3 (Hold) and has an earnings ESP of
+67.86%. The company has delivered an average earnings surprise of
13.46% over the trailing twelve months.
This California based company develops and commercializes
biopharmaceuticals for treating serious diseases and medical
conditions. The company's product portfolio comprises four approved
products besides multiple pipeline candidates. The company has seen
an increase in product revenues on a year-over-year basis in the
last four quarters.
is scheduled to report its third-quarter 2013 results on Oct 24.
) is a Zacks Rank #3 (Hold) stock and has an earnings ESP of
+2.56%. The Zacks Consensus Estimate stands at 78 cents. On an
average, Mylan has posted a solid positive surprise of 3.61% in the
past four quarters.
This Canonsburg, Pa.-based company specializes in the development,
manufacture, marketing, and distribution of generic, branded, and
branded generic pharmaceutical products, as well as active
pharmaceutical ingredients (APIs). Mylan's boasts of a vast
geographic reach, diversified product portfolio and robust generic
Mylan is one of the leading players in the global generics market
with a deep generic pipeline. Mylan's generics business segment is
expected to continue to perform well with a large number of
high-value branded pharmaceuticals going off-patent and many more
expected in the next few years.
is expected to report its third-quarter 2013 results before market
opens on Oct 31.
) Zacks Rank #3 (Hold) and an earnings ESP of +7.69% make it
another candidate of this category. For the third quarter, the
Zacks Consensus Estimate is pegged at a loss of 13 cents,
reflecting an increase of 23.5% on a year over year basis.
Incyte Corporation is a Wilmington, Del. based biopharmaceutical
company with a focus on oral compounds to treat inflammation and
cancer. The company's sole marketed product is Jakafi for
myelofibrosis. Jakafi has performed well since launch and is
expected to keep doing so going forward.
is scheduled to report its third-quarter 2013 results before market
opens on Oct 31.
While a number of companies will continue to face industry
challenges, many others are beyond their worries and are witnessing
a turnaround in results. As the pharma stocks look for a survival
strategy, a sneak peek to the space for some possible outperformers
could be a great idea for investors looking to profit this earnings
BIOMARIN PHARMA (BMRN): Free Stock Analysis
INCYTE CORP (INCY): Free Stock Analysis Report
MYLAN INC (MYL): Free Stock Analysis Report
SHIRE PLC-ADR (SHPG): Free Stock Analysis
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