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JNJ or PFE: Who has a Stronger EPS Guidance for Fiscal 2019?

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EPS guidance

In its first-quarter earnings press release, Johnson & Johnson (JNJ) has raised the guidance for adjusted diluted operational EPS (earnings per share) from previously projected $8.65 – $8.80 to $8.73 – $8.83. The new guidance excludes the impact of foreign currency fluctuations and implies YoY (year-over-year) growth of 6.7% – 7.9%, instead of the previously projected growth rate of 5.7% – 7.6%.

Johnson & Johnson has also changed the guidance for adjusted diluted EPS from previously projected $8.50 – $8.65 to $8.53 – $8.63. The new guidance assumes an increase of $0.05 of negative impact on EPS from January 2019 and implies YoY growth of 4.3% – 5.5%. The company had previously projected YoY adjusted diluted EPS growth rate in fiscal 2019 of 3.9% – 5.8%.

According to Johnson & Johnson’s first quarter earnings conference call, the company expects revenue impact of generic and biosimilar erosion to be close to $3.0 billion in fiscal 2019.

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In its fourth-quarter earnings conference call, Pfizer (PFE) has guided for adjusted diluted EPS of $2.82 – $2.92 for fiscal 2019. A $0.08 worth favorable EPS impact of gains and losses on equity investments was reported in fiscal 2018. While the company’s fiscal 2019 guidance does not include this favorable factor, it includes a negative impact of $0.06 due to FX movements. Graph 9

Wall Street’s projections

Wall Street analysts have projected Johnson & Johnson’s non-GAAP EPS (earnings per share) to be $8.60, $9.14, and $9.78, for fiscal 2019, fiscal 2020, and fiscal 2021, respectively. This implies a YoY change of 5.19%, 6.24%, and 7.02%, for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

On the other hand, Pfizer’s non-GAAP EPS are forecasted to change YoY by -3.76% to $2.89 in fiscal 2019, 5.92% to $3.06 in fiscal 2020, and 9.99% to $3.36 in fiscal 2021.

Johnson & Johnson is expected to report higher absolute revenues as well as stronger YoY EPS hike as compared to Pfizer in fiscal 2019.

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