Biogen Idec Inc. (BIIB) is scheduled to report third-quarter 2014 results before the opening bell on Oct 22. Last quarter, the company posted a positive earnings surprise of 24.64%. The company has recorded positive earnings surprises in three of the four trailing quarters with an average beat of 8.48%. Let’s see how things are shaping up for this announcement.
Factors at Play
Biogen holds a strong position in the multiple sclerosis (MS) market. In the third quarter, the company’s oral MS treatment Tecfidera should continue performing well. The product has been witnessing strong growth in the U.S. It was also well received in Germany and has exceeded expectations in terms of sales. Additional launches across EU should boost sales further.
Among other new launches, Alprolix for hemophilia B and Eloctate for hemophilia A should contribute to revenues. Alprolix is off to a good start following its launch in the U.S. market in May and has not faced significant reimbursement problems.
Tysabri and Avonex should also aid revenues. The company is also expected to benefit from the elimination of the reimbursement limit related to Tysabri sales in Italy as per its agreement with the Italian National Medicines Agency (AIFA).
Earnings Whispers?
Our proven model does not conclusively show that Biogen is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Zacks ESP: Earnings ESP for Biogen is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $3.22 per share.
Zacks Rank: Biogen carries a Zacks Rank #3 (Hold). Biogen’s Zacks Rank #3 when combined with an ESP of 0.00% makes surprise prediction difficult.
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 revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements:
Teva Pharmaceutical Industries Limited (TEVA) has an earnings ESP of +5.79% and carries a Zacks Rank #2 (Buy). It is scheduled to report third-quarter results on Oct 30.
The earnings ESP for Ligand Pharmaceuticals Inc. (LGND) is +30.00% and it carries a Zacks Rank #1 (Strong Buy). The company is scheduled to release third-quarter results on Oct 27.
Vertex Pharmaceuticals Incorporated (VRTX) has an earnings ESP of +28.07% and carries a Zacks Rank #3. It is expected to report third-quarter results on Oct 28.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment