Following the release of first quarter 2012 results, most of the
Johnson & Johnson
) have raised their earnings estimates for 2012. The revision in
estimates mainly reflects the guidance provided by the company.
First Quarter 2012 Recap
Johnson & Johnson posted first quarter 2012 earnings
(excluding special items) of $1.37 per share, a penny above the
Zacks Consensus Estimate and 1.5% above the year-ago earnings of
$1.35 per share. Revenues, however, declined 0.2% year-over-year to
$16.1 billion. Revenues were just shy of the Zacks Consensus
Estimate of $16.3 billion.
(Read our detailed earnings report at:
Marginal Beat for J&J; Outlook Up
Agreement of Analysts
Estimates for 2012 indicate a significant positive bias. 14 of
the 23 analysts covering the stock have raised their estimates for
2012 following the release of first quarter results with only 1
analyst moving in the opposite direction.
Meanwhile, the estimate revisions for 2013 are more balanced
with an equal number (7 each) of analysts revising their estimates
in either direction.
Over the last 7 days, there have been no estimate revisions for
2012 and 2013.
The upward revision in estimates reflects Johnson &
Johnson's revised outlook for 2012. Following the release of first
quarter results, Johnson & Johnson increased its earnings
guidance by a couple of cents to $5.07 - $5.17 per share (old
guidance: $5.05 to $5.15 per share). The guidance was increased to
reflect the positive impact of current exchange rates.
Magnitude - Consensus Estimate Trend
Although several analysts have raised their estimates for 2012,
the Zacks Consensus Estimate has gone up by just a couple of cents
to $5.12 per share. Meanwhile, the Zacks Consensus Estimate for
2013 remained unchanged at $3.44 per share.
Neutral on Johnson & Johnson
We currently have a Neutral recommendation on Johnson &
Johnson. The stock carries a Zacks #3 Rank (Hold rating) in the
short run. Even though we expect the company to continue facing
headwinds in the form of EU and Japan pricing pressure and
manufacturing issues, we believe Johnson & Johnson's
diversified business model, lack of cyclicality, strong financial
position will continue helping the company pave its way through
About Earnings Estimate Scorecard
As a PhD from MIT, Len Zacks proved over 30 years ago that
earnings estimate revisions are the most powerful force impacting
stock prices. He turned this ground breaking discovery into two
of the most celebrating stock rating systems in use today. The
Zacks Rank for stock trading in a 1 to 3 month time horizon and
the Zacks Recommendation for long-term investing (6+ months).
These "Earnings Estimate Scorecard" articles help analyze the
important aspects of estimate revisions for each stock after
their quarterly earnings announcements. Learn more about earnings
estimates and our proven stock ratings at
JOHNSON & JOHNS (JNJ): Free Stock Analysis
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