Zacks Investment Ideas Highlights: Regeneron and Bristol-Myers Squibb


For immediate release

Chicago, IL – April 8, 2022 – Today’s Zacks Investment Ideas feature highlights Regeneron Pharmaceuticals, Inc. REGN and Bristol-Myers Squibb Co. BMY.

BioPharma Giants Print New All-Time Highs

Investors may be hesitant to buy a stock that is making new all-time highs, but history has shown us that this is a sign of strength and higher highs are likely to come. The trend is our friend in this market, and the two biopharmaceutical stocks we’ll cover below are exceptionally trending.

As investors, we want to be in the major stocks. The problem for most investors is that they fail to notice the relevant signs and distinctions of leaders. They are too busy clinging to former losers in hopes of breaking even and refusing to recognize the “buy” signals that major stocks are showing below the surface. These investors often pay too much attention to the financial media, which are usually wrong and don’t normally invest in the stocks they tout on TV.

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Let’s discuss two biopharmaceutical stocks that have shown recent relative strength and are trending well this year. These stocks are leading the major indexes and showing signs of continued outperformance.

Regeneron Pharmaceuticals, Inc.

Regeneron Pharmaceuticals is a biopharmaceutical company that invents, develops, manufactures and markets therapeutic drugs for the treatment of serious medical conditions. REGN has developed therapeutic candidates for the potential treatment of obesity, rheumatoid arthritis, cancer and asthma. Founded in 1988 and based in Tarrytown, NY, REGN has established collaboration and licensing agreements with companies such as Sanofi, Bayer, Roche Pharmaceuticals, as well as an agreement with the US Department of Health and Human Services.

REGN’s primary growth driver is Eylea, its treatment for neovascular age-related macular degeneration and diabetic macular oedema. The growth of the US markets is driven by demographic trends with an aging population and an overall increase in the prevalence of diabetes. REGN saw an additional contribution from its REGEN-COV virus treatment which significantly increased its revenue. We expect sales to continue their recent trend as the pandemic persists.

Trading at an undervalued PER of 15.99 relative to its industry (23.75), Regeneron has exceeded earnings estimates in each of the past five quarters. The company made a surprise on the average earnings of the last four quarters of +32.36%. REGN recently reported Q4 EPS in February of $23.72, a surprise +28.29% from estimates. The stock has risen in step with these earnings beats, rising nearly 50% in the past year.

What the Zacks Model Reveals

The Zacks Earnings ESP (Expected Surprise Prediction) seeks to find companies that have recently experienced positive earnings estimate revision activity. This more recent information can be a better predictor of the future, which can give investors a head start during earnings season. The technique has proven to be very useful in finding positive surprises. In fact, combining a Zacks No. 3 or higher ranking and a positive earnings ESP, stocks produced a positive surprise 70% of the time.

REGN currently has a Zacks #3 Hold ranking and an ESP Earnings of +11.82%. The recent trend of earnings beats looks set to continue. The Zacks consensus estimate for Q1 EPS stands at $9.78, which would represent a slight decline of -1.11% from the same quarter last year. Sales are expected to climb 18% to $2.98 billion. REGN is due to publish its quarterly results on May 4and.

Bristol-Myers Squibb Co.

Bristol-Myers Squibb discovers, develops, licenses and manufactures biopharmaceuticals worldwide. Its products target hematology, oncology, cardiovascular issues, immunology, as well as COVID-19. BMY sells these products to wholesalers, distributors, pharmacies, hospitals, clinics and government agencies. Bristol-Myers Squibb was founded in 1887 and is based in New York, NY.

BMY has had a stellar record of earnings beats, missing estimates only once in the past four years. BMY has posted an average return of +1.01% over the past four quarters. The biopharmaceutical company is also relatively undervalued, trading at a forward P/E of just 9.67. The stock is up 25% this year and has so far proven to be one of the best performers of 2022.

Analysts expect growth to continue in the first quarter of this year. Zacks consensus EPS estimate for the first quarter is currently $1.93, which translates to growth of 10.92% over the same quarter a year ago. Sales are expected to climb 2.28% to $11.33 billion.

Be sure to put REGN and BMY on your watchlist if you haven’t already.

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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. To visit more information on the performance figures displayed in this press release.

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Regeneron Pharmaceuticals, Inc. (REGN): Free Stock Analysis Report

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