Earnings season is now well under way for the second quarter. So far, things are looking good. The biotech sector has yet to see any significant earnings representation. That will change during the week of July 21 to July 25 when at least six large biotech outfits are scheduled to report second-quarter earnings and revenues.
24/7 Wall St. has prepared a brief sector calendar for its readers and given earnings previews as well. Consensus earnings per share (EPS), revenue estimates and price targets are from Thomson Reuters.
We have also added in color on each, as well as valuation and performance metrics. We would also note that earnings estimates, and even the expected earnings dates, can change prior to the reporting dates.
Lastly, we have had several biotech analysts come out favorably on the biotech sector ahead of earnings. That is in part from volatility of late, as well as a partial reaction to the commentary from Fed Chair Janet Yellen including biotech as having unnamed overvalued representation in the market.
Baird identified two of these companies as buys ahead of earnings, and Leerink identified one of these six as a buy before earnings. UBS identified three of these six companies as buys ahead of the earnings report.
We would also caution one issue at the moment. We are in a climate right now where pharmaceuticals and biotechs are in a period of tax inversion mergers and acquisitions. This could take place in any such company looking at overseas opportunities for growth and for better effective tax rates.
These are the top six biotechs on deck to report in the week ahead.
Cubist Pharmaceuticals Inc. (NASDAQ: CBST) is expected to report earnings on Tuesday July 22 after the close. Earnings estimates are $0.02 per share and $299.6 million in revenue, and next quarter estimates are $0.05 per share earnings and $313.1 million in revenue.
Cubist closed out last week at $64.87 and the consensus price target was $82.87. Cubist shares were up 21% so far this year coming into this week and were up almost 8% in the past quarter. The stock is valued at almost $5 billion and trades at a lofty 35 times expected 2015 earnings.