Comparing the EPS Growth Trajectories of PFE and GSK

EPS performance

On its first-quarter earnings conference call, Pfizer (PFE) increased its 2019 adjusted diluted EPS guidance by $0.01 at the midpoint to $2.83–$2.93. To learn more about Pfizer’s EPS growth estimates, read Pfizer Raised Its 2019 EPS Guidance.

In its first-quarter earnings press release, GlaxoSmithKline (GSK) reiterated its guidance for a YoY (year-over-year) fall in its adjusted EPS of 5%–9% in 2019. This guidance accounts for factors such as the disposal of the company’s Consumer Healthcare nutrition business, which is expected by the end of 2019, the formation of its Consumer Healthcare joint venture with Pfizer, which is expected in the second half of 2019, the generic erosion of Advair, and the acquisition of Tesaro. GlaxoSmithKline expects its adjusted EPS to grow at a CAGR (compound annual growth rate) of close to the bottom end of the mid- to high-single-digit percentage range from 2016 to 2020. The company has assumed constant exchange rates based on rates in 2015.

Comparing the EPS Growth Trajectories of PFE and GSK

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EPS projections

Wall Street analysts expect Pfizer’s non-GAAP (generally accepted accounting principles) EPS to be $2.90, $3.05, and $3.30, respectively, in 2019, 2020, and 2021. These estimates imply YoY changes of -3.26%, 5.15%, and 8.18%, respectively, in 2019, 2020, and 2021. Pfizer’s non-GAAP EPS are expected to rise at a CAGR of 3.23% from 2018 to 2021.

On the other hand, Wall Street analysts expect GlaxoSmithKline’s non-GAAP EPS to be $2.91, $3.06, and $3.50, respectively, in 2019, 2020, and 2021. These estimates imply YoY changes of -6.25%, 5.15%, and 14.38%, respectively, in 2019, 2020, and 2021. GlaxoSmithKline’s non-GAAP EPS are expected to grow at a CAGR of 4.13% from 2018 to 2021.