3 Big Drug/Biotech Stocks Set To Beat Q3 Earnings Estimates

The third-quarter earnings season for the pharma sector begins next week with J&J (JNJ) set to report earnings on Oct 15.

The first half of the year was a mixed bag for big drug and biotech companies as far as earnings performance is concerned. While big names like Pfizer, Bristol-Myers and Lilly performed relatively poorly, Amgen, AstraZeneca, AbbVie, Sanofi and Merck delivered decent earnings and sales growth. The focus now shifts to the second half of the year. It is to be seen if the ones who did not do well in the first half recover in the second half and the ones that did well continue to deliver solid earnings and sales performance.

Overall, relatively newer drugs have been driving the top line of most of the big shots backed by higher demand - a trend we expect to have benefited third-quarter sales. However, mature products of some of these companies face an array of generic/biosimilar as well as branded competition, which might have put pressure on sales and margins in the to-be-reported quarter. Meanwhile, greater pricing pressure in the United States and negative currency impacts are some other top-line headwinds that the companies might have faced.

Here we have highlighted three bigshot drug/biotech companies, which are expected to deliver positive earnings surprise in the upcoming quarterly earnings.

By means of the Zacks Stock Screener, we have zeroed in on three drug/biotech stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP. These are valuable tools for investors looking for stocks with high potential to outpace estimates in the upcoming announcements. Moreover, stocks with a favorable Zacks Rank and a positive ESP have 70% chance to deliver a positive surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Our Picks

Amgen (AMGN - Free Report)

Amgen has an Earnings ESP of +2.31% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter earnings is pegged at $3.47 per share. The company is scheduled to release results on Oct 29.

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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