What's Coming For Large-Cap Pharma Stocks This Earnings Season?

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Q2 earnings season for large-cap pharmaceutical stocks is set to kick off when Eli Lilly and Co LLY reports results on Thursday morning. Piper Jaffray analyst Richard Purkiss released a report this week outlining what the market can expect once the action begins on Thursday.

Peak Forex Pressure?

According to Purkiss, Q2 will likely mark the peak of the forex headwinds that the big pharma companies have been facing. A strong dollar is bad news for
Pfizer Inc.PFE
, which has the highest international exposure (61 percent of revenue) of all the large-cap pharma stocks.

Pfizer’s leading international exposure is followed by Merck & Co, Inc. MRK at 58 percent, Lilly at 53 percent and Bristol-Myers Squibb Co BMY at 49 percent. AbbVie Inc ABBV will face the least forex headwinds, with only 47 percent of its business taking place internationally.

Related Link: Goldman Sachs Upgrades Anacor Pharma To Buy

Exclusivity Loss

Purkiss noted that Q2 marked the end of exclusivity for a couple of major drugs. Bristol-Myers’ quarter will be its first without exclusivity on
Abilify
, and Pfizer lost its exclusivity on
Celebrex
in Q2 as well.
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Predictions

  • Lilly: Piper Jaffray’s forecast is $0.01 above consensus earnings per share (EPS) and about $45 million above consensus revenue estimates.
  • Bristol-Myers: Piper Jaffray is calling for a 6 percent revenue beat and EPS of $0.39, $0.03 above consensus.
  • AbbVie: Piper Jaffray is mostly in-line with consensus on AbbVie, calling for EPS of $1.06 (versus consensus of $1.06) and revenue of $5.5 billion (versus consensus of $5.6 billion) for the quarter.
  • Merck: Piper Jaffray’s Q2 revenue estimates of $9.7 billion are in-line with consensus, but the firm sees a $0.02 EPS beat on stronger-than-consensus margins.
  • Pfizer: Piper Jaffray sees a miss on the horizon for Pfizer and is calling for EPS of $0.50 (versus consensus of $0.51) on revenue of $11.1 billion (versus consensus of $11.4 billion).
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Posted In: Analyst ColorBiotechHealth CarePreviewsAnalyst RatingsTrading IdeasPiper JaffrayRichard Purkiss
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