The Zacks Analyst Blog Highlights: Amgen, Johnson & Johnson, Pfizer, Mylan And Mallinckrodt

For Immediate Release

Chicago, IL – May 02, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Amgen Inc. ( (NASDAQ:AMGN) ), Johnson & Johnson ( (NYSE:JNJ) ), Pfizer Inc. ( (NYSE:PFE) ), Mylan N.V. ( (NASDAQ:MYL) ) and Mallinckrodt plc ( (NYSE:MNK) ).

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Here are highlights from Friday’s Analyst Blog:

3 Drug Stocks Reporting Earnings Next Week

As the first-quarter 2016 earnings season is well under way, results have not been as disappointing as widely apprehended. Are Low Expectations Helping Q1 Earnings Picture ?

With several pharma and major biotech companies having already reported their earnings results, the spotlight shifts to the Medical sector, which is anticipated to be one of the seven sectors to record earnings growth. Earnings in the Medical sector are expected to grow 2.3% on revenue growth of 9.1% from the year-ago period, per our Earnings Trends report.

Beats and Misses So Far

Several biotech stocks including Amgen Inc. ( (NASDAQ:AMGN) ) and pharma stocks like Johnson & Johnson ( (NYSE:JNJ) ), Abbott Laboratories (NYSE:ABT), and Bristol-Myers Squibb Company (NYSE:BMY) have not only managed to beat earnings estimates, but some among these have also raised their outlook for the year. There were misses as well.

Though label expansion and cost-cutting initiatives were catalysts to growth, unfavorable currency movements and macroeconomic factors held back performances.

Eli Lilly and Company (NYSE:LLY) raised its outlook for the year despite an earnings miss while Glaxo expects core earnings growth of 10–12% at constant exchange rate in 2016.

Meanwhile, a number of pharma and biotech companies are yet to report first-quarter results. Let’s see what awaits these three major drug stocks when they report on May 3, before the opening bell. Investors interested in the Medical sector will be keenly watching for beats and misses.

What to Expect from These Drug Stocks?

New York-based Pfizer Inc. ( (NYSE:PFE) ) was recently in the news when it terminated its $160 billion deal to combine with Botox maker Allergan (NYSE:AGN_pa) plc. Focus will now be on the company’s cash utilization plans. Meanwhile, the company continues to face headwinds in the form of genericization, unfavorable currency movement including the impact of the Venezuelan financial crisis and the expiration of a few co-promotion agreements. However, its share buyback program should boost the bottom line. However, its share buyback program should boost the bottom line.

Pfizer has been seen to consistently beat earnings expectations. Will this pharma giant be able to beat estimates this time around as well? This Zacks Rank #3 (Hold) stock has an Earnings ESP of 0.00% for the first quarter thereby making it difficult to predict a beat (read more: Pfizer to Report Q1 Earnings: Will the Stock Surprise? ).

Generic drug maker, Mylan N.V.’s ( (NASDAQ:MYL) ) Zacks Rank #3 increases the predictive power of the ESP, but it also has an ESP of -2.67%, making a surprise prediction difficult. Mylan’s track record has however been decent with the company surpassing expectations in two of the last four quarters.

Though the company’s Generics and Specialty segments should perform well in the first quarter, pricing dynamics that existed throughout 2015 would also continue in 2016. Mylan anticipates first-quarter earnings to be relatively flat with the year-ago period. Considering that Mylan is set to acquire a leading international specialty pharmaceutical company, Meda, focus will be on the deal (read more: Mylan Q1 Earnings: What's in the Cards for the Stock? ).

Specialty pharmaceutical and biopharmaceutical products manufacturer, Mallinckrodt plc’s ( (NYSE:MNK) ) track record has been pretty good with the company consistently beating earnings estimates. However, Mallinckrodt’s Zacks Rank #4 (Sell) which when combined with an ESP of -1.74% makes it difficult to predict an earnings beat when it reports its second-quarter fiscal 2016 results.

Though the company will benefit from the Sep 2015 Therakos acquisition (this is the first full quarter in which Therakos will contribute to results), seasonality is expected to continue in fiscal 2016, which will hurt gross profit (read more: Mallinckrodt Q1 Earnings: Stock Likely to Disappoint ).

Stay tuned! Check later on our full write-up on earnings releases of these stocks.

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