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ELAN or ZTS: Who Is Expected to Report Faster Revenue Growth?

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Revenue guidance for fiscal 2019

In its fourth-quarter earnings investor presentation, Elanco Animal Health (ELAN) confirmed its fiscal 2019 guidance provided by the company in mid-December 2018. The company guided for fiscal 2019 revenues in the range of $3.10 billion to $3.16 billion. In the guidance call, the company guided for fiscal 2019 core revenue excluding the impact of declining revenues from its Strategic Exits businesses to fall in the range of $3.04 billion to $3.10 billion, a YoY rise of 4% to 6% on a constant currency basis. The company expects to report revenues of $0.06 billion from its Strategic Exits businesses, which involves areas that the company has either already exited or plans to exit in coming months.

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In its fourth-quarter earnings investor presentation, Zoetis (ZTS) guided for fiscal 2019 revenues of $6.175 billion to $6.30 billion, YoY operational revenue growth of 7.5% to 9.5% driven by the company’s dermatology products, and legacy products from the recently acquired Abaxis. According to the company’s fourth-quarter earnings conference call, the company has forecasted organic operational revenue growth of 4.5% to 6.5%, which excludes 300 basis points worth of revenue impact associated with the Abaxis acquisition. The company also expects a negative revenue impact of 1.5% in fiscal 2019.

Wall Street’s projections

Wall Street analysts have projected Elanco Animal Health’s revenues to be $3.13 billion, $3.21 billion, and $3.31 billion, for fiscal 2019, fiscal 2020, and fiscal 2021, respectively, which implies YoY revenue growth of 2.08%, 2.57%, and 3.03% for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

On the other hand, Wall Street analysts have projected Zoetis’s revenues to be $6.26 billion, $6.62 billion, and $7.00 billion for fiscal 2019, fiscal 2020, and fiscal 2021, respectively, which implies YoY revenue growth of 7.40%, 5.84%, and 5.76% for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

Zoetis is expected to report higher YoY revenue growth from fiscal 2019 to fiscal 2021 as compared to Elanco Animal Health.

Next, we’ll discuss EPS projections for Elanco Animal Health and Zoetis in fiscal 2019.

 

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