Biogen's Hot Streak of Beating Earnings Estimates
Looking for a stock that might be in a good position to beat earnings at its next report? Consider Biogen Idec Inc. (BIIB), a firm in the biotechnology industry, which could be a great candidate for another beat.
This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, BIIB has beaten estimates by at least 15% in both cases, suggesting it has a nice short-term history of crushing expectations.
We issued a buy long recommendation on Biogen to all of our "Profit Rockets" subscribers back at the end of August 2013. This position is currently earning a 60% return, and we expect Biogen to continue higher. Click the link above for more information and a free trial of our "Profit Rockets" Stock Pick Service.
08/28/13 - Buy Biogen Idec - BIIB
Buy Entry: 203.54 to 210.99
Take Profit Areas: 233.76 to 237.47, 241.27 to 245.56, 264.58 to 268.98, 309.48 to 314.76
Biogen Earnings in Focus
Two quarters ago, BIIB expected to earn $2.80 per share, while it actually produced earnings of $3.49 per share, a beat of 24.6%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of $3.22 per share, when it actually saw earnings of $3.79 per share instead, representing a 17.7% positive surprise.
Thanks in part to this history, recent estimates have been moving higher for Biogen Idec. In fact, the Earnings ESP for BIIB is positive, which is a great sign of a coming beat.
After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company's earnings prospects. This is the case for BIIB, as the firm currently has a Zacks Earnings ESP of 1.34%, so another beat could be around the corner.
This is particularly true when you consider that BIIB has a great Zacks Rank #1 (Strong Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. And when you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that BIIB could see another beat at its next report, especially if recent trends are any guide.
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Disclosure: The author is long BIIB.