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Teva (TEVA) to Report Q2 Earnings: What's in the Cards?

Teva Pharmaceutical Industries Limited TEVA is scheduled to report second-quarter 2020 results on Aug 5, before market open.

In the last-reported quarter, the company delivered an earnings beat of 28.81%.

Teva Pharmaceutical Industries Ltd. Price and EPS Surprise

Teva Pharmaceutical Industries Ltd. Price and EPS Surprise

 

 

 

 

 

 

 

 

Teva Pharmaceutical Industries Ltd. price-eps-surprise | Teva Pharmaceutical Industries Ltd. Quote

Teva share price has risen 17.7% this year so far against the industry’s decrease of 5.9%.

 

Teva’s earnings performance has been mixed, with the company beating expectations in two of the past four quarters, matching estimates in one and missing the same in the remaining quarter. The four-quarter average earnings surprise is 7.23%.

Factors to Consider

In the second quarter, Teva’s branded drug sales are expected to have been hurt by generic erosion in sales of Copaxone and lower sales of Bendeka/Treanda. However, its new branded drug Austedo is expected to have provided top-line support as in the past few quarters.

Meanwhile, sales of its new CGRP, Ajovy were soft in the past few quarters. Management, in the past, had attributed the lower market share to preference of patients for auto injectors while Ajovy is available as a subcutaneous injection. Importantly, Teva’s auto injector device for Ajovy is now approved in the United States and EU and was launched in the United States in late April. We expect management to discuss how this new device has helped improve market share of the drug on the second-quarter conference call.

The Zacks Consensus Estimate for sales of Ajovy and Austedo in North America is $34.0 million and $135 million, respectively.

Teva’s new generic product launches including recently launched Truxima (biosimilar versions of Roche’s cancer drug Rituxan) and Herzuma  (biosimilar to Roche’s Herceptin) are likely to have boosted sales of its Generics unit, making up for price erosion.

The Zacks Consensus Estimate for sales of Copaxone and Generic Products in North America is pegged at $178 million and $918 million, respectively.

Overall, Teva’s sales in the first quarter had benefited from greater demand in several markets for generic and OTC products and respiratory products amid the coronavirus-related lockdown. However, the stockpiling benefit seen in the first quarter is likely to have reversed in the second quarter. Meanwhile, reduced physical interaction between its sales force and physicians could have resulted in slower uptake of new products.

Importantly, on its second-quarter earnings call, investors will also focus on whether Teva makes any changes to its business outlook for 2020 to include the updated impact of coronavirus.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Teva 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: Its Earnings ESP is -0.97% as the Zacks Consensus Estimate stands at 52 cents per share while the Most Accurate Estimate is 51 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Teva carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

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

AcelRx Pharmaceuticals, Inc. ACRX has an Earnings ESP of +40.74% and carries a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Translate Bio, Inc. TBIO has an Earnings ESP of +5.26% and holds a Zacks Rank of 2.

Pacira BioSciences, Inc. PCRX has an Earnings ESP of +28.42% and carries a Zacks Rank of 2.

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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.

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