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When big pharma company

Pfizer

reports earnings on Tuesday, before the market opens, all eyes will be on the guidance the company issues for 2023, and how steeply

Pfizer

expects Covid-19 vaccine sales to drop this year.

Wall Street analysts expect Pfizer (ticker: PFE) to earn $4.33 per share in 2023, according to FactSet, down from the $6.50 per share they estimate the company earned in 2022. Analysts expect Pfizer to earn $1.05 per share in the fourth quarter on sales of $24.4 billion, compared with year-ago earnings $1.08 per share on sales of $23.8 billion. The company is hosting an investor call at 10 a.m. eastern time.

Last week,

Johnson & Johnson

(JNJ), the first of Pfizer’s big pharma peers to report earnings this season, guided above Wall Street expectations for 2023, despite warnings issued earlier in the month by

Johnson & Johnson

‘s CEO that the broader economic picture remains uncertain.

For Pfizer, uncertainties go beyond the broader economy. Like other firms that saw revenue spike during the pandemic, Pfizer is bracing for a top-line dip in 2023.

Covid-19 vaccine and therapeutic sales are expected to drop sharply this year, as the pandemic abates, and as the federal government steps back from purchasing Covid-19 jabs, clearing the way for a commercial market.

Analysts expect Pfizer’s Covid-19 vaccine sales to drop to $14.2 billion in 2023 from an expected $34.1 billion in 2022. The company’s guidance will come Tuesday.

Pfizer Chief Financial Officer David Denton told investors in December that the company has a “clear line of sight” to revenue growth of 7% to 9% in 2023, not including Covid-19 products and the impact of exchange rates. That suggests revenue of $47 billion to $48 billion in 2023, not including Covid-19 products; those Covid-19 products, however, remain the biggest source of debate for the stock.

In one sign of continuing demand for the shots, the Food and Drug Administration signaled last week plans to shift to an annual booster schedule, similar to the annual schedule for influenza vaccines. The agency’s advisors voted to support a proposal to simplify the current vaccination effort by recommending that the same strain composition be used in all Covid-19 vaccine doses administered in the U.S.

Also on investors’ minds are the approaching patent cliffs; Pfizer has said it expects to lose $17 billion in annual revenue by 2030 from patent expirations. The company has laid out a plan to more than make up for those losses through a series of near-term launches and business development.

So far, the market remains unconvinced. Pfizer stock trades at 10 times earnings expected over the next 12 months, well below those of peers such as Johnson & Johnson, which trades at 16 times earnings, and

Eli Lilly

(LLY), which trades at 40 times earnings.

Pfizer stock is down 14% this year, and down 16.3% over the latest 12 months.

Write to Josh Nathan-Kazis at [email protected]