Is Biogen (BIIB) Poised to Beat Earnings Estimates? - Analyst Blog

Biogen Idec Inc. BIIB is scheduled to report first quarter 2014 results before the opening bell on Apr 23.

Last quarter, Biogen had posted an earnings surprise of +4.95%. We expect the company to beat expectations in the first quarter as well.

Why a Likely Positive Surprise?

Our proven model shows that Biogen is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: The Earnings ESP (Expected Surprise Prediction), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +8.14%. This is a very meaningful and leading indicator of a likely positive earnings surprise.

Zacks #1 Rank (Strong Buy): Note that stocks with Zacks Rank #1, #2 and #3 have a significantly higher chance of beating earnings estimates. 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 revision momentum.

The combination of Biogen's Zacks Rank #1 (Strong Buy) and an earnings ESP of +8.14% make us confident of an earnings beat on Apr 23.

What Is Driving Better-than-Expected Earnings?

Biogen has an impressive track record and delivered positive earnings surprises in the last four quarters with an average beat of 15.62%.

Biogen's multiple sclerosis franchise, particularly Avonex and Tysabri should continue to perform well. Meanwhile, newly launched Tecfidera should remain a growth driver and boost revenues despite the presence of new entrants in the multiple sclerosis market.

Other Stocks to Consider

Biogen is not the only company looking up this earnings season. We also see likely earnings beats coming from these companies in the medical sector:

Eli Lilly and Co. LLY has an Earnings ESP of +4.29% and holds a Zacks Rank #3 (Hold). Eli Lilly will report first quarter earnings on Apr 24.

Actavis plc ACT has an Earnings ESP of +1.85% and holds a Zacks Rank #2 (Buy). Actavis will report first quarter earnings on Apr 30.

Teva Pharmaceutical Industries Ltd. TEVA has an Earnings ESP of +0.81% and holds a Zacks Rank #1. Teva will report first quarter earnings on May 1.