5 Drug/Biotech Stocks Likely To Surpass On Earnings In Q3

The third-quarter earnings season for the pharma/biotech sector started last week, putting up an impressive performance so far in the reporting cycle. Good news is that most pharma bigwigs like Johnson & Johnson and Novartis beat on both sales and earnings as well as raised their guidance, combating generic plus biosimilar competition. Swiss pharma giant Roche too delivered a stellar performance on the back of new drugs, a trend that most likely benefited third-quarter sales for other major biggies.

Additionally, on the biotech front, Alexion and Biogen registered strong numbers, surpassing on both counts as their blockbuster drugs continue to drive growth. Moreover, the companies came up with positive pipeline updates.
While a decline in the legacy drug sales and pipeline setbacks were expected to leave an adverse impact on the margins and annual guidances, most companies lifted their annual outlook, buoying investor optimism on the stocks. New drug approvals and label expansions of blockbuster drugs are expected to have kept the momentum alive in the third quarter for most companies, enabling them to fight headwinds like pricing pressure and stiff rivalry.

How to Pick Probable Q3 Winners?

There are multiple drug/biotech companies poised to beat on third-quarter earnings. However, given a large number of drug/biotech entities, the task of selecting stocks with possibilities to surpass on expectations appears quite daunting.

With the help of the Zacks Stock Screener, we have zeroed in on five drug/biotech stocks that carry a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP. This is a valuable tool for investors looking for stocks with the maximum potential to beat estimates. Our research shows that with this combination, chances of positive surprise are as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

5 Stocks Poised to Outperform

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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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