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PFE or AZN: Comparing Their Earnings Growth in 2019

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Apr. 12 2019, Published 10:05 a.m. ET

Earnings guidance

On its fourth-quarter earnings conference call, Pfizer (PFE) said that it expected its 2019 adjusted diluted EPS to be $2.82–$2.92, which doesn’t include gains and losses on equity investments. The company expects a flat YoY (year-over-year) adjusted EPS performance at the midpoint of the guidance range, excluding $900 million worth of anticipated negative revenue impact or $0.06 worth of EPS impact from foreign currency fluctuations at 2018 foreign exchange rates. Pfizer expects to make share repurchases worth $9.0 billion in 2019.

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Pfizer, however, has guided for generic erosion headwinds worth $2.6 billion in 2019, a YoY rise of almost $900 million. The rise is mainly associated with the expected LOE (loss of exclusivity) of Lyrica in June 2019. However, after Lyrica’s revenue stabilizes, the company has projected an LOE-free period until 2025. According to its fourth-quarter earnings conference call, Pfizer expects YoY mid-single-digit revenue growth for five years starting in 2021, with its 2020 revenue serving as a base value.

Wall Street’s projections

Wall Street analysts expect Pfizer’s non-GAAP (generally accepted accounting principles) EPS to be $2.89, $3.06, and $3.38, respectively, in 2019, 2020, and 2021, implying YoY changes of -3.74%, 6.02%, and 10.39%, respectively.

On the other hand, Wall Street analysts expect AstraZeneca’s non-GAAP EPS to be $1.71, $2.10, and $2.67, respectively, in 2019, 2020, and 2021, implying YoY changes of -1.04%, 22.43%, and 27.39%, respectively.

Pfizer is expected to report higher absolute non-GAAP EPS but a lower compound average growth rate in its EPS than AstraZeneca from 2019 to 2021.

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