Forest Laboratories, Inc.
) is scheduled to report its second quarter fiscal 2014 (ended
Sep 30, 2013) earnings before the opening bell on Oct 22,
Last quarter, Forest Labs beat expectations with an earnings
surprise of 300%. We expect the trend to continue in the second
Why a Likely Positive Surprise?
Our proven model shows that Forest Labs is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
(Expected Surprise Prediction), which represents the difference
between the Most Accurate estimate and the Zacks Consensus
Estimate, is +15.39%. This is a meaningful and leading indicator
of a likely positive earnings surprise for the shares.
Zacks Rank #2 (Buy):
Note that stocks with a Zacks Rank #1, 2 and 3 have a
significantly higher chance of beating earnings estimates. We
caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revision momentum.
The combination of Forest Labs' Zacks Rank #2 and an ESP of
+15.39% makes us confident of an earnings beat on Oct 22.
Factors at Play
Bystolic, a key growth driver at Forest Labs, should continue
performing well in the second quarter of fiscal 2014. A low
side-effect profile coupled with positive efficacy and
tolerability data should drive Bystolic's revenues. Apart from
Bystolic, Namenda, which was underperforming lately, could see an
improvement in its performance with the company working on
transitioning users to the recently-launched XR formulation.
Meanwhile, Forest Labs has been very active in launching new
products over the last few quarters. The company has launched a
number of products including Teflaro (for the treatment of
patients suffering from acute bacterial skin and skin structure
infection and community acquired bacterial pneumonia), Daliresp
(chronic obstructive pulmonary disease - COPD), Tudorza (COPD),
Viibryd (major depressive disorder), and Linzess
(constipation-predominant irritable bowel syndrome and chronic
constipation. Better-than-expected performance of these new
products will drive results.
We expect investor focus to remain on the new CEO's long-term
strategy for the company.
Other Stocks to Consider
Forest Labs is not the only company looking up this earnings
season. We also see likely earnings beat coming from these
Eli Lilly and Company
) has Earnings ESP of +1.92% and holds a Zacks Rank #3. Eli Lilly
will be reporting third quarter earnings on Oct 23 before the
BioMarin Pharmaceutical, Inc.
) has Earnings ESP of +3.57% and holds a Zacks Rank #3. BioMarin
will be reporting third quarter earnings on Oct 24 after market
) has Earnings ESP of +6.10% and holds a Zacks Rank #3. Shire
will be reporting third quarter earnings on Oct 24 before the
BIOMARIN PHARMA (BMRN): Free Stock Analysis
FOREST LABS A (FRX): Free Stock Analysis
LILLY ELI & CO (LLY): Free Stock Analysis
SHIRE PLC-ADR (SHPG): Free Stock Analysis
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