Big pharma earnings preview: what to expect from GSK and AstraZeneca Q1 results

Britain’s two largest drug makers both unveil their first quarter results on Wednesday, with investors eager to an update on how the Covid-19 crisis impacted the pairs performance.

GlaxoSmithKline (GSK) and AstraZeneca both unveil their first quarter (Q1) results on Wednesday, with investors keen to see the impact of the Covid-19 crisis on their financial performance.

AstraZeneca is looking to increase its total revenue by a ‘high single-digit to a low double-digit percentage’ and its core earnings per share (EPS) is forecast to increase by a ‘mid- to high-teens percentage’, according to its previous guidance.

GSK is expecting adjusted EPS to decline by -1% to -4% CER and is targeting a dividend pay-out of 80p per share in 2020.

Investors will be interested to see the impact of the coronavirus on both drug markers performance over their first three months of trading, though most companies guidance this year is heavily weighted towards the latter half of 2020.

GSK: technical analysis

Shares in GSK have been on a rip of late, with the market valuation gaining 28% since the March lows. The question from here is whether we can sustain this uptrend, as the stock pushes towards the prior peak of £18.25, according to Josh Mahony, senior market analyst at IG.

The short-term outlook will be dictated by the reaction to this confluence of resistance, with the ascending trendline and 76.4% Fibonacci resistance level meeting around £17.08. A break through this inflection point could bring about a bullish continuation signal.

However, given the existence of this current bearish rising wedge pattern, we could see some downside come into play if this zone of resistance is not broken. In particular, if we break below £16.43, things could start taking a more significant bearish turn.

AstraZeneca: technical analysis

AstraZeneca shares have experienced an incredible 41% upside since the March low, with the stock hitting a record high for three-weeks in a row.

This wider weekly chart highlights how significant this move has been, with a standard deviation channel indicating that things could be a little stretched at these levels.

For now we have not seen any bearish intraday signals, yet it could be prudent to be aware of a potential pullback if the short-term picture starts to sour somewhat.

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