We expect
Johnson & Johnson
JNJ
to beat expectations when it reports first-quarter 2022 results on Apr 19, before market open. In the last-reported quarter, the company delivered an earnings surprise of 0.47%.
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 7.77%, on average.
Johnson & Johnson Price and EPS Surprise
Johnson & Johnson price-eps-surprise
|
Johnson & Johnson Quote
J&J’s stock has risen 5.8% this year so far compared with an increase of 8.4% for the
industry
.
Image Source: Zacks Investment Research
Factors to Consider
J&J’s Pharma segment is expected to have continued to outperform the market led by increased penetration and new indications across key products such as Darzalex and Stelara.
The Zacks Consensus Estimate for Darzalex and Stelara is pegged at $1.71 billion and $2.43 billion, respectively.
Other core products like Invega Sustenna/Xeplion/Invega Trinza/Trevicta and new drugs, Erleada and Tremfya might have contributed significantly to sales growth. J&J’s single-dose COVID-19 vaccine is also likely to have contributed to sales growth. A booster shot of the vaccine was authorized in October 2021, which is likely to have boosted sales.
Improvement in sales of some other key drugs like Xarelto seen in the past few quarters is likely to have continued into the first quarter. The Zacks Consensus Estimate for Xarelto is $607 million.
Rising competitive pressure in the United States to new oral competition is likely to have hurt sales of key drug, Imbruvica in the first quarter. The Zacks Consensus Estimate for Imbruvica is $1.13 billion.
Generic/biosimilar competition for drugs like Zytiga, Procrit/Eprex and Remicade is likely to have hurt the top line.
The Zacks Consensus Estimate for J&J’s Pharmaceuticals unit is $13.8 billion.
With regard to the Medical Devices segment, COVID-19 headwinds and hospital staffing shortages are likely to have continued to hurt procedure volume trends in the first quarter. The Zacks Consensus Estimate for J&J’s Medical Devices segment is $6.8 billion.
In the Consumer Healthcare segment, the improving trend seen in the last couple of quarters is likely to have continued. However, external supply constraints (due to raw material availability and labor shortages) are likely to have continued to hurt sales of the skin health and beauty franchise.
The Zacks Consensus Estimate for J&J’s Consumer Healthcare segment is $3.58 billion.
J&J plans to separate its Consumer Health segment into a new publicly-traded company
Management might announce key executive leadership appointments for the new Consumer Health company on the first-quarter conference call and may also announce the new company name and headquarters location.
On the fourth-quarter conference call, its new chief executive officer (CEO) Joaquin Duato had said the company is taking a more aggressive stance on M&A activity as its strong cash position will help it pursue tuck-in M&A to grow its business. An update is expected on the first-quarter conference call.
Earnings Whispers
Our proven model predicts an earnings beat for J&J in the to-be-reported quarter. A stock needs to have both a positive
Earnings ESP
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP:
J&J’s Earnings ESP is +1.14% as the Most Accurate Estimate of $2.64 is higher than the Zacks Consensus Estimate of $2.61. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter
.
Zacks Rank:
J&J has a Zacks Rank #3
Other Stocks to Consider
Here are some large drug stocks that also have the right combination of elements to beat on earnings this time around:
Merck
MRK
with an Earnings ESP of +4.28% and a Zacks Rank #3. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Merck’s stock has risen 14.4% this year so far. Merck topped earnings estimates in two of the last four quarters. Merk has a four-quarter earnings surprise of 5.33%, on average. MRK is scheduled to release its first-quarter 2022 results on Apr 28.
Lilly
LLY
has an Earnings ESP of +7.38% and a Zacks Rank #3.
Lilly’s stock has rallied 9.7% this year so far. Lilly missed earnings estimates in each of the last four quarters. Lilly has a four-quarter negative earnings surprise of 3.92%, on average. LLY is scheduled to release its first-quarter 2022 results on Apr 28.
AbbVie
ABBV
with an Earnings ESP of +0.48% and a Zacks Rank #3.
AbbVie’s stock has surged 22.2% in the past year. AbbVie topped earnings estimates in three of the last four quarters. AbbVie has a four-quarter earnings surprise of 2.55%, on average. ABBV is scheduled to release its first-quarter 2022 results on Apr 29.
Stay on top of upcoming earnings announcements with the
Zacks Earnings Calendar
.
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