For Johnson & Johnson (NYSE:JNJ), Wells Fargo sees in-line Q4 FY21 despite incremental omicron headwind and underlying growth guidance for FY22 but conservative EPS.
- The analyst has lowered the Q4 sales forecast by $134 million, to $24.9 billion (vs. consensus of $25.1 billion), primarily due to lower FX tailwind, representing 12.5% adjusted operational growth (+4.7% ex-vaccine).
- Q4 EPS estimate remains unchanged at $2.14, slightly below the consensus of $2.16.
- For FY22, Wells Fargo anticipates JNJ guiding conservatively, with 4-5% adjusted operational sales growth (ex-COVID vaccine) and ex-FX EPS growth of 5-6%.
- Also See: Johnson & Johnson To Spin-Off Consumer Health Business: What You Need To Know.
- COVID vaccine represents potential multi-billion sales upside to their current model but is not expected to impact the bottom line materially, notes Wells Fargo.
- The analyst models 2022 adjusted operational sales growth of 3.4%, or +6.1% ex-vaccine, and EPS of $10.19, below the consensus of $10.38, reflecting differences in FX headwind and tax rate assumptions.
- Wells Fargo anticipates modest softness in JNJ's Q4 Medical Device sales. It sees medical device sales of $6.9 billion, or 6.0% adjusted operational growth.
- The analyst forecast Q4 consumer segment sales of $3.7 billion or up 2.8% adjusted operational Y/Y.
- Price Action: JNJ shares are down 0.79% at $167.41 during the market session on the last check Thursday.
