Celgene (CELG: $97, down $22) reduced its 2020 sales guidance to range of $19 billion to $20 billion from its previous forecast of more than $21 billion. They also lowered their 2020 earnings-per-share guidance to more than $12.50 from more than $13.00. "In consideration of certain market dynamics and recent pipeline events, we are updating our 2020 outlook, and remain confident in our ability to deliver industry leading growth," Celgene CEO Mark Alles said in a company press release Thursday.
Celgene's profit did beat expectations, as income was $1.91 per share on sales of $3.3 billion, compared with $1.58 and $3.0 billion in the year-earlier period. Expectations were for $1.75 to $1.85 a share. But sales were light of the $3.42 billion expected.
Celgene expects full-year earnings in the range of $7.30 to $7.35 per share, with revenue expected to be $13 billion.
BMR Take: All of this sounds good, but Wall Street sure doesn’t like it and investors sold the stock heavily this morning. These kinds of things make us crazy. We added the stock last summer at $95 and it went to $147 just last month. And now we see this free-fall. Sometimes we think that investing in Healthcare is just too much trouble. Here we have a company that beat expectations, but says that things will slow down just a little in the future and the stock takes a dive. Very frustrating.
What should you do? We said this just three days ago in our weekly newsletter: We continue to believe in Celgene. But if you are worried, then get out of the kitchen. There are lots of other choices for your money.
But now we are $23 lower in price – very unfortunate, so if you don’t own it you can certainly get in here now, or if you do, you can punt, buy more or sit tight. The company still remains a powerhouse, is very profitable and a year from now when things settle down, the stock will probably have rebounded a bit. Not very comforting, as sometimes reality hurts.