Q1 Preview: Bellwether Johnson & Johnson (JNJ) has New CEO, Patent Expiration on Its Plate

Shares of Johnson & Johnson (NYSE: JNJ) are trading higher heading into the diversified healthcare giant's first-quarter report, expected out before the market opens Tuesday.

The Street is currently looking for Johnson & Johnson to report EPS of $1.35 on revs of $16.28 billion. Numbers compare with EPS of $1.35 and revs of $16.2 billion reported in the same period last year.

Shares of Johnson & Johnson moved 1.5 percent higher through the quarter to $65.96 at the end of March. Shares are down 2.8 percent since. Johnson & Johnson ended 2011 up about 10 percent.

16 analysts have Johnson & Johnson rated with a Buy, 13 are at Hold, and none suggest to Sell. The Street's average price target is $70, which ranges from $64 to $77. The Street's average target reflects additional 9.2 percent of upside for Johnson & Johnson over the next year.

Analyst Comments

• Goldman Sachs sees EPS of $1.36. Goldman is looking for more color on Johnson & Johnson's three new reporting segments -- General Surgery, Infectious Disease, and Specialty Surgery -- as well as some color on its Pharma and Consumer businesses. Other key points include:
  • Commercial outlook for Xarelto given slower than expected launch, and upcoming competition from Eliquis;
    
  • Track new product cycles (Xarelto, Zytiga, and Incivo);
    
  • HCV market dynamics given 7977 and ABT quad data; and
    
  • Timing and outlook for OTC products returning to the market
• Leerink Swann sees EPS of $1.36 and revs of $16.38 billion.
  
  Some focus will also be around the recent appointment of Alex Gorsky as CEO, as well as detail into its leadership team. Other key points Leerink thinks investors should pay attention to include:
  • Macro trends and implications for the industry: as always, investors will look to JNJ’s results to gauge macroeconomic and procedure trends in the quarter and the possible impact for 2012 for the industry as a whole.
    
  • New product impacts: better gauging of the outlook for recent and upcoming product launches/indications, particularly Zytiga and Xarelto, as well as upcoming clinical milestones and updates from the late-stage pipeline.
    
  • Resolving controversies: gauging the speed of return to market for many OTC products and the potential impact of new issues such as the Risperdal settlements also may garner attention on the post-release call.
  Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Johnson & Johnson's past performance at Streetinsider's Johnson & Johnson's Income Statement.

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