Johnson & Johnson (JNJ) AI Stock Analysis

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Johnson & Johnson

(NYSE:JNJ)

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Outperform 73 (OpenAI - 5.2)

Rating:73Outperform

Price Target:

$266.00

▲(7.80% Upside)

Action:ReiteratedDate:02/12/26

The score is driven primarily by strong, durable cash generation and solid operating performance, reinforced by constructive 2026 guidance and portfolio/pipeline momentum. The rating is tempered by stretched technical conditions, moderate-to-premium valuation, and ongoing headwinds (tariffs, litigation/one-time charges, and residual biosimilar/competitive pressures).

Positive Factors

Free cash flow generation

Consistently strong free cash flow (≈$20B in 2025; guidance ≈$21B for 2026) underpins durable capital allocation flexibility. This cash enables sustained R&D and M&A, supports the dividend and planned orthopedics separation, and cushions operational headwinds over the medium term.

Diversified, portfolio-driven model

A three-pronged business (Pharmaceuticals, Medical Devices, Consumer Health) with broad commercial momentum reduces dependence on any single product. Portfolio balance and global distribution provide resilience to localized shocks and make revenue trends more durable over the next several quarters.

R&D productivity and approvals

High approval and trial throughput (numerous approvals, filings, positive readouts and new Phase III starts) signals sustained innovation capacity. A productive pipeline increases the probability of near- to mid-term commercial launches that can replace legacy revenue and support long-term growth.

Negative Factors

STELARA biosimilar erosion

A near-50% sales decline for STELARA represents a material, structural revenue loss for the pharma portfolio. Replacement depends on timely launches and uptake of pipeline assets; until new products scale, STELARA erosion remains a durable drag on growth and segment profit margins.

Elevated litigation and one-time charges

Significant litigation expenses and reserve volatility introduce persistent earnings and cash-flow uncertainty. Ongoing legal matters can force sizeable, irregular cash outflows, constrain discretionary investment, and complicate forecasting and capital allocation over multiple quarters.

Tariffs and MedTech execution/reimbursement risk

Large, recurring medtech tariffs (~$500M) and competitive/reimbursement challenges raise structural margin pressure in Devices. These cost and execution headwinds can compress operating margins and slow realization from new device launches, impacting medium-term profitability.

Johnson & Johnson (JNJ) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$599.00B

Dividend Yield2.5%

Average Volume (3M)9.16M

Price to Earnings (P/E)22.5

Beta (1Y)0.09

Revenue Growth6.05%

EPS GrowthN/A

CountryUS

Employees138,100

SectorHealthcare

Sector Strength45

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)2.46

Shares Outstanding2,409,899,000

10 Day Avg. Volume9,012,079

30 Day Avg. Volume9,164,215

Financial Highlights & Ratios

PEG Ratio0.21

Price to Book (P/B)6.18

Price to Sales (P/S)5.35

P/FCF Ratio25.59

Enterprise Value/Market Cap1.04

Enterprise Value/Revenue6.61

Enterprise Value/Gross Profit9.08

Enterprise Value/Ebitda15.63

Forecast

1Y Price Target

$244.77

Price Target Upside-0.80% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering14

EPS Forecast (FY)11.57

Revenue Forecast (FY)$100.40B

Johnson & Johnson Business Overview & Revenue Model

Company DescriptionJohnson & Johnson, together with its subsidiaries, researches and develops, manufactures, and sells various products in the healthcare field worldwide, but strategically separated its Consumer Health business into Kenvue Inc. in 2023 to focus on its higher-growth, innovation-driven segments; the former Consumer Health brands (including TYLENOL, LISTERINE, and BAND-AID) are now owned by Kenvue. The company's core focus is now split between its Innovative Medicine (formerly Pharmaceutical) segment, which offers prescription products for complex diseases such as rheumatoid arthritis, various cancers, HIV/AIDS, and neurodegenerative disorders; and its MedTech (Medical Devices) segment, which provides advanced technology solutions including electrophysiology products, neurovascular care products, orthopaedics (hips, knees, spine), advanced surgery solutions, and disposable contact lenses under the ACUVUE brand. Company's two remaining segments primarily serve hospitals, healthcare professionals, wholesalers, and retailers, continuing its mission of advancing human health since its founding in 1886 and its current basing in New Brunswick, New Jersey.

How the Company Makes MoneyJohnson & Johnson generates revenue through a diversified business model that encompasses three primary segments: Pharmaceuticals, Medical Devices, and Consumer Health. The Pharmaceutical segment, which contributes a substantial portion of revenue, includes products for immunology, oncology, neuroscience, and infectious diseases, among others. The Medical Devices segment includes a wide range of surgical instruments, orthopedics, and interventional solutions, while the Consumer Health segment features well-known brands such as Tylenol, Band-Aid, and Neutrogena. Key revenue streams include direct sales to healthcare providers, hospitals, and consumers, as well as partnerships and collaborations with other healthcare organizations for research and development. The company also benefits from a strong global distribution network and strategic acquisitions that enhance its product offerings and market reach. Factors such as ongoing innovation, regulatory approvals for new drugs, and the expansion of existing product lines significantly contribute to Johnson & Johnson's earnings.

Johnson & Johnson Key Performance Indicators (KPIs)

Any

Revenue by Geography

Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.

Chart InsightsJohnson & Johnson's U.S. revenue shows a robust recovery, peaking in mid-2025, reflecting strong performance in Innovative Medicine and MedTech. European revenue is stabilizing after a dip, while Asia Pacific and Africa face persistent challenges. The earnings call highlights a 5.4% operational sales growth, driven by successful product launches like Inlexo and CARVICTI. Despite STELARA's decline and tax challenges, J&J's strategic focus on high-growth areas and the planned separation of its Orthopedics business signal a positive outlook for sustained revenue growth.

Data provided by:

The Fly

Johnson & Johnson Earnings Call Summary

Earnings Call Date:Jan 21, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:Apr 14, 2026

Earnings Call Sentiment Positive

The call highlights a dominant message of accelerating, portfolio-driven growth: robust revenue and adjusted EPS growth, strong free cash flow, numerous approvals and late-stage programs, and notable commercial momentum across oncology, immunology, neuroscience, and MedTech. Management provided constructive 2026 guidance, reiterated long-term ambition (double-digit growth by the end of the decade), and outlined capital deployment and the orthopedics separation. Offsetting risks include material STELARA biosimilar erosion (a substantial multi-hundred-basis-point headwind), elevated litigation and one-time charges, tariff pressures, competitive dynamics in select MedTech areas, and modest share-count dilution. On balance, the positives — broad-based commercial strength, pipeline and approval milestones, robust cash generation, and clear guidance — materially outweigh the near-term headwinds.

Q4-2025 Updates

Positive Updates

Strong Full-Year and Q4 Revenue

Full-year 2025 worldwide sales of $94.2 billion, up 5.3% operationally; Q4 2025 sales of $24.6 billion, up 7.1% operationally despite a ~650 basis point headwind from STELARA.

Adjusted Earnings and EPS Growth

Full-year adjusted net earnings of $26.2 billion and adjusted diluted EPS of $10.79, up 8.1% year-over-year; Q4 adjusted diluted EPS of $2.46, up 21.5% versus prior year.

Robust Free Cash Flow and Balance Sheet Strength

Generated $19.7 billion of free cash flow in 2025; ended the year with ~$20 billion in cash and marketable securities and net debt of ~$28 billion; company expects free cash flow of ~ $21 billion in 2026.

Innovation and Pipeline Momentum

In 2025 J&J secured 51 approvals, filed 32 submissions across major markets, delivered positive readouts from 17 key studies, and initiated 11 new Phase III programs — signaling substantial R&D productivity.

Oncology Outperformance

Oncology delivered ~21% operational sales growth in 2025; DARZALEX is the largest pharma product with annual sales > $14 billion (full-year growth ~22–24%); CARVICTI treated >10,000 patients and Carvictee sales reached $555 million, up 63.2% in the quarter.

Immunology Momentum (Tremfya and Pipeline)

Tremfya full-year sales accelerated to > $5 billion and Q4 growth of ~65.4% (quarter), becoming the fastest-growing IL-23 therapy; company projects Tremfya could exceed $10 billion in peak sales and expects approval/launch of oral icotide in 2026.

Neuroscience and New Launches

Spravato continued strong growth (year-over-year growth cited at 57%–67.8% depending on period) with >200,000 patients treated worldwide; CAPLYTA launched in the US for adjunctive major depressive disorder and is viewed as a ~$5 billion peak year opportunity.

MedTech Growth and Product Momentum

MedTech sales of $8.8 billion in the quarter increased 5.8% operationally; cardiovascular grew ~15% for the year with Abiomed (18.3% growth) and Shockwave (22.9%); Surgery and Vision showed accelerating momentum with 15 major launches and >40 regulatory approvals in 2025.

2026 Guidance and Long-Term Outlook

Guidance for 2026 operational sales growth of 5.7%–6.7% (midpoint ~$100 billion / 6.2% operational), adjusted EPS growth of ~5.5% at midpoint, and management reiterates line of sight to double-digit revenue growth by the end of the decade.

Capital Allocation and Strategic Actions

Invested > $32 billion in R&D and M&A in 2025 (including Intracellular and Halda), started new manufacturing facilities in the U.S., and progressed a planned orthopedics separation targeted for mid-2027 to sharpen portfolio focus.

Negative Updates

STELARA Biosimilar Impact

STELARA declined ~48.6% in the period and created a significant headwind (~620 to 1,110 basis points referenced across results), cited as a major drag though management says it is now largely in the rearview mirror.

Litigation and Related Charges

Other income/expense swung to a net expense of $483 million (versus $161 million income prior year) driven by higher litigation costs (~$900 million related to Aura shareholder resolution) and a $200 million nonrecurring Holder Employee Equity Awards charge; talc matters remain active (noting a $7 billion talc reserve reversal in Q1 2025) and ongoing appeals.

Tariffs and P&L Pressure

Company cited tariff headwinds that deleveraged cost of goods sold by ~80 basis points and expects full-year medtech tariffs of approximately $500 million in 2026, which management incorporated into guidance.

Competitive and Market Pressures

Competitive pressures noted in pulse field ablation (PFA) electrophysiology, energy and endocutters in surgery, and volume-based procurement (VBP) pressures in China affecting medtech performance in some categories; Symphony and OPSUMIT expected generic impact beginning in 2026.

Increased Share Count Dilution

Diluted share count expected to increase to ~2.44 billion shares (GAAP diluted) due to share price appreciation, representing an incremental EPS headwind of slightly more than $0.05 versus 2025.

Margin and Expense Volatility

While adjusted margins improved, there were deleverages in cost of goods sold and decreased interest income (net $23 million vs $144 million prior year), and other quarterly swings that create near-term P&L variability.

Regulatory / Reimbursement Timing Risks

Some promising launches (e.g., Inlexo, Otava robotics) require further reimbursement and coding milestones (Inlexo permanent J-code expected Q2) and regulatory approvals (e.g., Otava de novo) which present execution and timing risk for upside.

Company Guidance

Management guided 2026 operational sales growth of 5.7%–6.7% (midpoint 6.2%, ~$100.0B) with acquisitions/divestitures adding ~30 bps (adjusted operational midpoint 5.9%) and a fifty‑third week worth ~100 bps; reported sales growth is expected 6.2%–7.2% (midpoint $100.5B, 6.7%). They forecast free cash flow of ≈$21B, an adjusted pretax operating margin improvement of at least 50 bps, net interest expense of $300M–$400M, net other income of $1.0–$1.2B, and an effective tax rate of 17.5%–18.5%. Adjusted operational EPS guidance is $11.28–$11.48 (≈5.5% growth at the midpoint) and reported adjusted EPS midpoint is $11.53 after a $0.15 FX benefit; diluted share count is expected to be ~2.44B (incremental dilution a little over $0.05 headwind). Management also called out ~$500M of full‑year medtech tariffs, plans to invest operating efficiencies into the business, and said sales growth should be fairly consistent through the year with a stronger Q4 and higher EPS growth in H2 versus H1.

Johnson & Johnson Financial Statement Overview

Summary

High-quality fundamentals supported by steady multi-year revenue expansion, strong profitability, and consistently strong free cash flow. Offsets include year-to-year earnings volatility and reduced confidence in the latest balance-sheet snapshot due to apparent data inconsistencies.

Income Statement

Positive

Revenue has expanded steadily over the last several years, with acceleration in the most recent annual period. Profitability is strong overall, with high gross margin and a solid net margin in the latest year, indicating good pricing power and cost control. That said, earnings have been volatile year-to-year (notably an unusually high profit year followed by a much lower year), which raises questions around sustainability and the level of one-time items embedded in reported profits.

Balance Sheet

Positive

Leverage looks reasonable in most annual periods, with debt at about half of equity recently, which is conservative for a large, diversified healthcare company. Returns on equity have been healthy in most years, reflecting solid profitability. However, the latest annual balance sheet snapshot shows debt at zero and equity/assets that are implausibly small versus prior years, suggesting a data inconsistency; this reduces confidence in the most recent balance-sheet-derived conclusions.

Cash Flow

Very Positive

Cash generation is consistently strong, with operating cash flow holding up well across years and free cash flow tracking closely to reported earnings. Free cash flow has generally grown (with a couple of down years), and recent growth is positive again, supporting dividend capacity and reinvestment flexibility. A minor caution is that cash flow growth has not been perfectly smooth, and the latest year’s cash flow coverage metric appears inconsistent with the reported debt value, pointing to some data quality noise in the most recent snapshot.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	94.19B	88.82B	85.16B	79.99B	78.74B
Gross Profit	68.56B	61.35B	58.61B	55.39B	55.34B
EBITDA	39.90B	24.78B	23.32B	26.61B	26.75B
Net Income	26.80B	14.07B	35.15B	17.94B	20.88B
Balance Sheet
Total Assets	199.21B	180.10B	167.56B	187.38B	182.02B
Cash, Cash Equivalents and Short-Term Investments	20.10B	24.52B	22.93B	22.28B	31.61B
Total Debt	47.93B	36.63B	29.33B	39.64B	33.75B
Total Liabilities	117.67B	108.61B	98.78B	110.57B	108.00B
Stockholders Equity	81.54B	71.49B	68.77B	76.80B	74.02B
Cash Flow
Free Cash Flow	19.70B	19.84B	18.25B	17.18B	19.76B
Operating Cash Flow	24.53B	24.27B	22.79B	21.19B	23.41B
Investing Cash Flow	-23.59B	-18.60B	878.00M	-12.37B	-8.68B
Financing Cash Flow	-5.54B	-3.13B	-15.82B	-8.87B	-14.05B

Johnson & Johnson Technical Analysis

Technical Analysis Sentiment

Positive

Last Price246.75

Price Trends

50DMA

223.54

Positive

100DMA

209.15

Positive

200DMA

186.22

Positive

Market Momentum

MACD

6.83

Positive

RSI

73.26

Negative

STOCH

70.77

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JNJ, the sentiment is Positive. The current price of 246.75 is above the 20-day moving average (MA) of 240.92, above the 50-day MA of 223.54, and above the 200-day MA of 186.22, indicating a bullish trend. The MACD of 6.83 indicates Positive momentum. The RSI at 73.26 is Negative, neither overbought nor oversold. The STOCH value of 70.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JNJ.

Johnson & Johnson Risk Analysis

Johnson & Johnson disclosed 20 risk factors in its most recent earnings report. Johnson & Johnson reported the most risks in the "Legal & Regulatory" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Johnson & Johnson Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRK	78 Outperform	$300.17B	17.01	36.91%	3.12%	1.59%	58.02%
NVS	77 Outperform	$317.37B	23.26	31.14%	2.87%	11.53%	-15.21%
JNJ	73 Outperform	$599.00B	22.52	35.03%	2.50%	6.05%	―
AZN	73 Outperform	£236.53B	31.05	22.34%	1.53%	10.20%	40.57%
SNY	69 Neutral	$115.34B	20.23	6.76%	4.58%	-9.32%	120.62%
ABBV	60 Neutral	$414.21B	98.30	9999.00%	2.87%	7.40%	-53.78%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

* Healthcare Sector Average

Performance Comparison

JNJ

Johnson & Johnson

248.56

87.62

54.45%

MRK

Merck & Company

121.41

32.20

36.09%

NVS

Novartis

166.87

58.73

54.31%

SNY

Sanofi

47.66

-8.26

-14.77%

ABBV

AbbVie

234.26

33.24

16.54%

GB:AZN

AstraZeneca

15,252.00

3,394.66

28.63%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Feb 12, 2026