uploads/2019/02/Graph-11-2-1.png

ABT or SYK: Which Is Expected to Report Faster Revenue Growth?

By

Updated

Revenue guidance for 2019

On its fourth-quarter conference call, Abbott Laboratories (ABT) stated that it expected its sales to grow organically by 6.5%–7.5% YoY (year-over-year) in 2019 due to a foreign exchange impact of 3% in the first half. 

The company expects its 2019 sales to grow organically by ~7% YoY in the first quarter, with the comparison affected by a higher revenue base in the first quarter of 2018 due to an unusually strong performance by its Rapid Diagnostics segment in the period. Abbott expects to see a 5.5% currency impact in the quarter.

Article continues below advertisement

On its fourth-quarter conference call, Stryker (SYK) stated that it expects its sales to grow organically by 6.5%–7.5% YoY in 2019 due to a 0.5% impact from foreign exchange, assuming current exchange rates. The company expects stronger performance in the third and fourth quarters of 2019, benefiting from the ramp-up of new product launches and recently completed acquisitions such as Novadaq, Invuity, and K2M. Stryker expects a price drop of 1%–1.5% in 2019.

Although both Abbott Laboratories and Stryker have projected similar organic growth for 2019, Abbott’s higher international market penetration makes it more vulnerable to currency fluctuations.

Wall Street’s projections

Analysts expect Abbott’s revenue to rise 1.11% YoY to $7.47 billion in the first quarter, 4.14% YoY to $31.84 billion in 2019, 6.92% YoY to $34.05 billion in 2020, and 6.69% YoY to $36.32 billion in 2021.

Analysts expect Stryker’s revenue to rise 8.50% YoY to $3.52 billion in the first quarter, 8.77% YoY to $14.79 billion in 2019, 6.81% YoY to $15.80 billion in 2020, and 6.30% YoY to $16.80 billion in 2021.

Although Abbott’s absolute revenue is higher than Stryker’s, Wall Street analysts expect the latter to grow its revenue at a higher reported rate until 2020.

Next, we’ll discuss EPS projections for Abbott Laboratories and Stryker in 2019.

Advertisement

More From Market Realist