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Drug Stocks Earnings Slated for Feb 14: INCY, PRTA & More

The year 2017 seems to have started on a positive note for investors in the U.S. Approximately 71.6% of the companies (or 358 members) in the S&P 500 Index have reported results so far.

Per the Earnings Trends , an impressive 69% of the companies reported in the index have beaten earnings expectations while 54.7% beat on the top line. Moreover, earnings of these 358 index members are up 6.1% on 4.6% higher revenues buoyed by strong performance. As a result, growth rates posted in the quarter are the highest recorded in the last two years as total earning for the period is poised to set a new record. Around 53 companies are expected to report results this week. Hence, by the end of the week, approximately 80% of the total index would have reported results, thereby offering a clearer earnings picture.

Meanwhile, although estimates have come down, the magnitude of the decline has been significantly lower than the historical levels. Moreover, the growth rate is expected to ramp up remarkably in the coming quarters. This should boost investors' optimism substantially.

How Have Drug Stocks Fared So Far?

Quite a few major pharma and biotech companies have reported results so far with the performance being mixed. Sector bellwether Johnson & Johnson JNJ reported mixed results, wherein earnings beat estimates but revenues missed the same. The same goes for bigwigs like Biogen, Inc. BIIB and AbbVie, Inc. ABBV . Eli Lilly and Company LLY and Pfizer, Inc. PFE , on the other hand, beat on revenues but missed earnings expectations. Celgene's CELG fourth-quarter results were disappointing, with the company missing on both the top and the bottom line while Gilead Sciences GILD beat on estimates but provided a disappointing outlook for 2017 amid a declining HCV franchise.

We note that Medical is one of the sectors expected to record growth in the positive territory in the fourth quarter. Earnings for the sector is expected to improve 2.5% on a revenue improvement of 6.7% even though 2016 was a challenging year for the pharmaceuticals sector as it was under constant medical scrutiny due to drug pricing issues

As of Feb 8, 68.5% companies in the Medical sector reported results, putting up a blended beat of 48.6% (the percentage of companies that have beaten both earnings and revenue estimates). Overall the sector has registered 5.3% earnings growth on 5.7% higher revenues.

Let's find out what's in store for a few companies scheduled to report results on Feb 14.

Incyte CorporationINCY is scheduled to report results on Feb 14. Incyte's track record is positive, with the company beating estimates in three and missing in the one of the last four trailing quarters. Overall, the company recorded an average positive earnings surprise of 431.4%. Incyte's only marketed product, Jakafi, looks well positioned and should continue to drive top-line growth.

The company's top line should also get a boost from sales of Iclusig in the EU. In Sep 2016, Jakafi was included as a recommended treatment for MF in the latest National Comprehensive Cancer Network Clinical Practice Guidelines in Oncology. Jakafi sales are expected to get a boost from the updated labels. Incyte currently carries a Zacks Rank #3 (Hold) and has an Earnings ESP of +85.7%. You can see the complete list of today's Zacks #1 Rank stocks here .

Estimates for 2016 are marginally up ahead the company's Q4 release but estimates for 2017 are down. The company's favorable rank and positive ESP makes us reasonably confident of an earnings beat this quarter.

Incyte Corporation Price and EPS Surprise

Incyte Corporation Price and EPS Surprise | Incyte Corporation Quote

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Prothena CorporationPRTA is scheduled to report fourth-quarter and full-year 2016 results on Feb 14. With no approved product in its portfolio, investor focus should remain on pipeline updates by the company. The company's pipeline candidates include NEOD001 for the treatment of AL amyloidosis, PRX003 for the treatment of inflammatory diseases, including psoriasis and psoriatic arthritis and PRX002 for the treatment of Parkinson's disease and other related synucleinopathies. Prothena's track record has been dismal so far.

Over the four trailing quarters, the company's earnings have missed estimates thrice and beat the same on one occasion, bringing the average negative earnings surprise to 11.73%. The company currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -13.7% which makes it highly unlikely for an earnings beat this quarter (Read more: Can Prothena Pull a Surprise This Earnings Season? ).

Prothena Corporation PLC Price and EPS Surprise

Prothena Corporation PLC Price and EPS Surprise | Prothena Corporation PLC Quote

Acorda Therapeutics, Inc.ACOR is scheduled to report fourth-quarter and full-year 2016 results on Feb 14. The company has a mixed track record. Estimates have remained stable lately. Over the four trailing quarters, the company's earnings have beaten estimates twice and missed the same on one occasion, bringing the average positive earnings surprise to 168.27%. The company's lead marketed product is Ampyra (dalfampridine, ex-U.S. trade name: Fampyra), approved for the improvement of walking in multiple sclerosis (MS) patients.

The company currently carries a Zacks Rank #3 and an Earnings ESP of -38.9%. Although the favorable rank increases the predictive power of ESP, the negative ESP makes surprise prediction difficult.

Acorda Therapeutics, Inc. Price and EPS Surprise

Acorda Therapeutics, Inc. Price and EPS Surprise | Acorda Therapeutics, Inc. Quote

Axovant SciencesAXON is expected to report results on Feb 14. This clinical-stage biopharmaceutical company is focused on acquiring, developing and commercializing novel therapeutics for the treatment of dementia. The company's track record has been dismal so far. Over the four trailing quarters, the company's earnings have missed estimates in all the four quarters bringing the average negative earnings surprise to 90.5%. The company currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.0% which makes it highly unlikely to post an earnings beat this quarter.

Axovant Sciences Ltd. Price and EPS Surprise

Axovant Sciences Ltd. Price and EPS Surprise | Axovant Sciences Ltd. Quote

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Pfizer, Inc. (PFE): Free Stock Analysis Report

Eli Lilly and Company (LLY): Free Stock Analysis Report

Johnson & Johnson (JNJ): Free Stock Analysis Report

Gilead Sciences, Inc. (GILD): Free Stock Analysis Report

Celgene Corporation (CELG): Free Stock Analysis Report

Acorda Therapeutics, Inc. (ACOR): Free Stock Analysis Report

Incyte Corporation (INCY): Free Stock Analysis Report

Biogen Inc. (BIIB): Free Stock Analysis Report

AbbVie Inc. (ABBV): Free Stock Analysis Report

Prothena Corporation PLC (PRTA): Free Stock Analysis Report

Axovant Sciences Ltd. (AXON): 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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