The drug industry’s Q2 earnings season launches next week with three of its biggest names, whose broad portfolios could give investors a preview of how the business in general is doing.
The big kahuna, Johnson & Johnson (JNJ), on Tuesday morning is expected to report 1% year-over-year sales growth, but a modest decline in EPS to $1.68 a share. The stock is trading near all-time highs after rising 20% for the year, due to “strong pharma trends, and flight to safety and yield,” wrote RBC Capital Markets analyst Glenn Novarro in his July 8 preview note.
Analysts are expecting another good quarter for J&J’s pharma business; Novarro wrote that based on prescription data from IMS Health (IMS), four of J&J’s biggest drugs — Remicade, Imbruvica, Invokana and Xarelto — will beat consensus. Credit Suisse analyst Vamil Divan, in his July 10 preview, lowered his estimates for Invokana while raising them for Remicade and Xarelto. But he said he was concerned about the entry of cheaper biosimilar versions of Remicade later this year. Pfizer‘s (PFE) Remicade biosimilar was approved by the FDA in April.
IBD’S TAKE: Most drug stocks have taken a pounding this year, but J&J has proved Read Full Article
Source: Technology – IBD