Healthcare stock Johnson & Johnson (JNJ) is set to report its Q1 earnings tomorrow – April 14. The stock is up nearly 16% in the year-to-date helped by demand for its innovative MedTech products and medicines.
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According to TipRanks’ Options tool, options traders expect about a 3.48% move in either direction in JNJ stock in reaction to its Q1 results.
What Wall Street Expects
Wall Street expects Johnson & Johnson to report Q1 earnings of $2.68 per share and revenues of $23.44 billion. While revenue is expected to grow 7.1% year-over-year, earnings may decline slightly by 3.3%.
Will JNJ beat these forecasts? As can be seen below, it has a strong track record of doing just that in recent quarters.
Key Issues Ahead of Earnings
According to Zacks, sales in J&J’s Innovative Medicine segment are expected to have been driven by higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains. Its estimates for those three products are pegged respectively at $3.81 billion, $1.42 billion and $919 million. However, sales of Stelara, targeting plaque psoriasis, psoriatic arthritis, Crohn’s disease, and ulcerative colitis, and leukemia drug Imbruvica are likely to have declined.
J&J’s MedTech business is expected to continue seeing strong momentum in Cardiovascular, Surgery and Vision in the first quarter. This is despite headwinds in China as the government looks to cut costs in the sector.
What do analysts say? TD Cowen recently assumed coverage of Johnson & Johnson with a Buy rating and $250 price target. Analyst Michael Nedelcovych sees the company’s “strong” product portfolio driving 7% annual sales growth through 2032. He said that Johnson & Johnson’s pipeline provides visibility on long-term growth, and its margin expansion creates above-peer earnings power through 2032.
Is JNJ a Good Stock to Buy Now?
On TipRanks, JNJ has a Moderate Buy consensus based on 11 Buy and 6 Hold ratings. Its highest price target is $285. JNJ stock’s consensus price target is $254.93, implying a 7.34% upside.
