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Drug Stock Earnings to Watch on Jan 26: BIIB, CELG & BMY

Investors around the world are seeing a ray of hope as the fourth-quarter earnings season kicked off on an encouraging note. Both earnings and sales growth in Q4 are tracking above other recent periods and on track to reach the highest level in the last eight quarters.

With Q4 earnings underway, approximately 63 S&P 500 members (representing 19.2% of the index's total market capitalization) have already reported quarterly results as of Jan 20. An impressive 66.7% of these companies managed to post an earnings beat, while 50.8% recorded better-than-expected sales.

The pace of growth is anticipated to improve steadily this earnings season. As per the Earnings Preview , earnings for the S&P 500 companies are on track to grow 4.8% in Q4 from the year-ago period on 3.7% higher revenues.

Meanwhile, a plethora of earnings reports are yet to come out with more than 300 companies including 105 S&P 500 members due to report this week. This should add more clarity to the overall earnings picture.

What's in Store for the Medical Sector?

Medical is one of the sectors expected to perform well in the fourth quarter with earnings projected to grow 2.9% on revenue growth of 5.6%.

As of Jan 20, only 1.9% companies in the Medical sector have reported results, recording a blended beat of 100% (the percentage of companies that have beaten both earnings and revenue estimates). Overall, the sector has registered 51.1% earnings growth on 9% higher revenues.

Healthcare giant and industry bellwether, Johnson & Johnson JNJ reported mixed fourth-quarter results with earnings beating estimates and sales missing the same. The company is currently looking for strategic options for its diabetes care division. (Read More: J&J Q4 Earnings Top; Seeks Options for Diabetes Unit ).

We note that the sector has faced challenging conditions for more than a year due to media and political focus on steep drug pricing issues. Against this backdrop, let's take a sneak peek into three companies in the medical sector that are scheduled to report fourth-quarter and full-year results on Jan 26.

What Await these Drug Stocks?

Multiple sclerosis (MS) market leader Biogen Inc.BIIB is scheduled to release results before market open. Biogen has an impressive track record with the company consistently beating earnings expectations, thereby bringing the average earnings surprise to 8.15%. However, the company currently carries a Zacks Rank #2 (Buy) and an Earnings ESP of -1.21%, making it difficult to conclusively predict an earnings beat this quarter. You can see the complete list of today's Zacks #1 Rank stocks here .

The Zacks Consensus Estimate for the quarter is pegged at $4.97 per share. In the upcoming earnings call, we expect investors focus to remain on Tecfidera's performance. Investor focus should also be on the company's update on commercialization plans for newly approved spinal muscular atrophy drug, Spinraza. (Read more: Biogen Q4 Earnings: What's in Store for the Stock? ).

Biogen Inc. Price and EPS Surprise

Biogen Inc. Price and EPS Surprise | Biogen Inc. Quote

Biotech company, Celgene CorporationCELG will also be releasing its results before the opening bell. Celgene has an impressive track record, having surpassed earnings expectations in three of the last four quarters, with an average positive surprise of 4.94%. This Zacks Rank #3 (Hold) stock currently has an ESP of 0.00% for Q4, thereby making it difficult to predict a positive surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

The Zacks Consensus Estimate for the quarter is pegged at $1.43 per share. Celgene's key product, Revlimid, will continue to act as the key growth driver, contributing significantly to the company's top line. Apart from Revlimid, performance of other drugs - Pomalyst/Imnovid, Otezla and Abraxane - will also be in focus. (Read more: Celgene Q4 Earnings: Will the Stock Pull a Surprise? ).

Celgene Corporation Price and EPS Surprise

Celgene Corporation Price and EPS Surprise | Celgene Corporation Quote

Large-cap pharma stock, Bristol-Myers Squibb CompanyBMY is scheduled to report results before market opens. Bristol-Myers has an impressive track record with the company consistently beating earnings expectations in each of the last four quarters. The company has an average positive earnings surprise of 17.32%. Will this pharma giant be able to keep its earnings streak alive? With a Zacks Rank #3 stock and an Earnings ESP of -3.03%, we are not sure if the company can beat on earnings this quarter.

The Zacks Consensus Estimate for the quarter is pegged at 66 cents per share. Investor focus will be on the performance of key products including high-profile immuno-oncology drug, Opdivo. The HIV and HCV franchises are expected to remain under competitive pressure. (Read more: Bristol-Myers Q4 Earnings: Will the Stock Disappoint? ).

Bristol-Myers Squibb Company Price and EPS Surprise

Bristol-Myers Squibb Company Price and EPS Surprise | Bristol-Myers Squibb Company Quote

Stay tuned! Check later on our full write-up on earnings releases of these stocks.

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

Johnson & Johnson (JNJ): Free Stock Analysis Report

Celgene Corporation (CELG): Free Stock Analysis Report

Biogen Inc. (BIIB): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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