Markets

Sanofi (SNY) to Report Q2 Earnings: What's in the Cards?

Sanofi SNY will report second-quarter 2020 results on Jul 29, before market open. In the last reported quarter, the company delivered earnings surprise of 18.42%.

This France-based drugmaker’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. The company has a four-quarter earnings surprise of 11.51%, on average.

Sanofi Price and EPS Surprise

Sanofi Price and EPS Surprise

Sanofi price-eps-surprise | Sanofi Quote

 

Sanofi stock has risen 1.9% this year so far against a decrease of 0.2% for the industry

 

 

 

Factors to Consider

In the second quarter, total revenues are expected to have declined at a low single-digit rate year over year due to the reversal of the first-quarter benefits of COVID-19. In the first quarter, Sanofi’s sales and profits had benefited from stockpiling of chronic therapies including diabetes medicines.

Sanofi’s Specialty Care and Vaccines units are likely to have performed well in the second quarter.

Sanofi’s Specialty Care segment sales are likely to have been driven by its blockbuster drug, Dupixent. 

Dupixent sales in the quarter are likely to have been driven by continued growth in atopic dermatitis and rapid uptake in new asthma indication and launch in chronic rhinosinusitis with nasal polyposis in 2019. However, Dupixent sales in the second quarter may have been hurt by a slower rate of new patient starts due to fewer in-person doctor visits. Please note that Sanofi markets Dupixent in partnership with Regeneron REGN.

Sales of Sanofi’s rare disease and oncology drugs are likely to have increased in the second quarter. However, sales in the Diabetes unit are likely to have been hurt once again by pricing pressure in the United States. In Europe, sales of diabetes drugs had risen in the first quarter due to patient stockpiling, which is likely to have reversed in the second quarter.

Also, Established Rx Products unit’s sales might reflect generic/biosimilar headwinds.

Vaccines sales are expected to reflect a significant headwind from reduced travel vaccination and the postponement of pediatric vaccinations and boosters.

In the Consumer Healthcare unit, higher demand mainly of cough and cold and pain medicines due to COVID-19 related consumer stockpiling benefited sales in the first quarter. However, this benefit is likely to have reversed in the second quarter. Meanwhile, recall of its over-the-counter acid reflux medicine Zantac, non-core divestments and increased regulatory requirements, which resulted in product suspensions are expected to have put pressure on the top line. Meanwhile, the unit could also have seen a significant negative impact of reduced consumer traffic in pharmacy.

Investors will look for any changes to its financial guidance for 2020 on the second-quarter conference call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Sanofi this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate of 63 cents and the Zacks Consensus Estimate of 67 cents is -6.82%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Sanofi has a Zacks Rank #3.

Stocks to Consider

Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:

Incyte INCY with an Earnings ESP of +4.62% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pfizer PFE has an Earnings ESP of +7.03% and a Zacks Rank #3.

Zacks Top 10 Stocks for 2020

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?

Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2020 today >>


Click to get this free report

Regeneron Pharmaceuticals, Inc. (REGN): Free Stock Analysis Report

Sanofi (SNY): Free Stock Analysis Report

Pfizer Inc. (PFE): Free Stock Analysis Report

Incyte Corporation (INCY): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More