Johnson & Johnson (JNJ) AI Stock Analysis

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Johnson & Johnson

(NYSE:JNJ)

Rating:76Outperform

Price Target:

$174.00

▲(13.54%Upside)

Johnson & Johnson's overall score reflects its strong financial performance and positive earnings call, countered by technical analysis indicators showing a lack of momentum and the negative impact of a bankruptcy plan rejection. While valuations are reasonable, the stock faces challenges in maintaining growth and cash flow, along with external headwinds from tariffs and competition.

Positive Factors

Financial Performance

JNJ's strong 1Q25 performance, with Tremfya beating VA consensus by 6%, is seen as evidence of its positive trajectory.

Product Launch and Growth

Tremfya IBD launch momentum, with JNJ noting it is the fastest growing IL-23 agent in ulcerative colitis, and the KOLs highlighting strong commercial access and support.

Negative Factors

Market Objectivity Concerns

Investors should be aware that there might be a conflict of interest affecting the objectivity of the Goldman Sachs report.

U.S. Market Challenges

Management openly acknowledged U.S. performance headwinds and detailed specific actions underway to pivot the business for renewed growth.

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

Market Cap

$368.73B

Dividend Yield3.24%

Average Volume (3M)8.23M

Price to Earnings (P/E)17.0

Beta (1Y)0.21

Revenue Growth-0.37%

EPS Growth29.21%

CountryUS

Employees138,100

SectorHealthcare

Sector Strength40

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)2.77

Shares Outstanding2,406,073,200

10 Day Avg. Volume8,707,276

30 Day Avg. Volume8,234,776

Financial Highlights & Ratios

PEG Ratio0.48

Price to Book (P/B)4.78

Price to Sales (P/S)0.00

P/FCF Ratio20.16

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$170.53

Price Target Upside11.28% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering15

Johnson & Johnson Business Overview & Revenue Model

Company DescriptionJohnson & Johnson is a global leader in the healthcare industry, with operations spanning pharmaceuticals, medical devices, and consumer health products. Founded in 1886, the company is headquartered in New Brunswick, New Jersey, and has a presence in over 60 countries. Its core products include prescription medicines, surgical equipment, diagnostic tools, and consumer health products such as baby care, skin care, and over-the-counter pharmaceuticals.

How the Company Makes MoneyJohnson & Johnson generates revenue primarily through its three business segments: Pharmaceutical, Medical Devices, and Consumer Health. The Pharmaceutical segment is the largest, focusing on areas such as immunology, oncology, neuroscience, and infectious diseases, delivering innovative treatments and therapies. The Medical Devices segment provides a wide range of products used in surgery, orthopedics, cardiovascular care, and diabetes care. The Consumer Health segment offers well-known brands like Neutrogena, Tylenol, and Johnson's Baby. The company also benefits from strategic partnerships, research and development investments, and a strong global distribution network, all contributing to its robust revenue streams.

Johnson & Johnson Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Highlights revenue from different business units such as pharmaceuticals, medical devices, and consumer health, providing insight into which segments drive growth and profitability.

Chart InsightsJohnson & Johnson's Pharmaceutical segment maintains robust growth, driven by key brands like DARZALEX and Tremfya, despite headwinds from STELARA's exclusivity loss. MedTech shows steady expansion, bolstered by strategic acquisitions. However, Consumer Health revenue drops to zero, likely due to the segment's spin-off into Kenvue. The earnings call highlights a positive outlook with raised sales guidance, but challenges like tariff impacts and biosimilar competition persist. Investors should note the company's commitment to innovation and strategic investments, which are expected to drive future growth.

Data provided by:

Main Street Data

Johnson & Johnson Earnings Call Summary

Earnings Call Date:Apr 15, 2025

(Q1-2025)

% Change Since: 0.13%|

Next Earnings Date:Jul 22, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong start to 2025 for Johnson & Johnson, driven by robust sales growth in innovative medicine and MedTech, significant oncology advancements, and strategic investments. However, challenges such as the decline in STELARA sales, tariff impacts, and orthopedics disruptions pose headwinds.

Q1-2025 Updates

Positive Updates

Strong Operational Sales Growth

Johnson & Johnson delivered a 4.2% operational sales growth in Q1 2025, with significant contributions from innovative medicine and MedTech sectors.

DARZALEX Performance

DARZALEX achieved over 20% growth, with sales above $3 billion for the third consecutive quarter, and expanded its indication in Europe for multiple myeloma.

Oncology Advancements

Riboflavin plus LASCRUZ showed over a year improvement in overall survival for EGFR-mutated lung cancer, and subcutaneous riboflavin was approved in Europe.

Tremfya's Market Impact

Tremfya entered the inflammatory bowel disease market, with a 20% sales growth, and is expected to become a $10 billion-plus product.

MedTech Segment Growth

MedTech delivered 4.1% operational sales growth, with strong performances in cardiovascular businesses and surgical vision.

Significant Investment Plans

Johnson & Johnson announced a $55 billion investment in the U.S. over the next four years, including four new manufacturing facilities.

Dividend Increase

The company increased its dividend for the sixty-third consecutive year.

Negative Updates

STELARA Sales Decline

STELARA sales faced a 32.3% decline due to biosimilar competition and Part D redesign.

Orthopedics Sales Impact

Orthopedics sales declined 3.1% due to one-time revenue recognition changes, fewer selling days, and transformation disruptions.

Gross Margin Pressure

Gross margins came in below trends due to STELARA's decline, currency headwinds, and Part D erosion.

Tariff Challenges

The company anticipates a $400 million impact from tariffs, affecting cost structures and pricing strategies.

Company Guidance

During the Johnson & Johnson First Quarter 2025 Earnings Conference Call, the company provided guidance and reported financial metrics reflecting strong operational sales growth of 4.2% across its business sectors. The innovative medicine segment saw a 4.2% sales increase despite an 810 basis points headwind from the loss of exclusivity on STELARA. Key brands, including DARZALEX, Tremfya, and Ribrofant plus LASCRUZ, showcased robust growth, with DARZALEX exceeding $3 billion in sales and Tremfya achieving 20% growth due to its new indications. The MedTech segment also reported a 4.1% sales increase, driven by strategic acquisitions such as Abiomed and Shockwave. The company raised its operational sales guidance for the full year to reflect the addition of Caplyta, projecting operational sales growth between 3.3% and 4.3%. This guidance incorporates a positive foreign currency impact, resulting in a full-year headwind of $600 million. Johnson & Johnson maintained its adjusted reported earnings per share guidance of $10.50 to $10.70, representing a 6.2% increase at the midpoint, despite challenges such as tariffs and biosimilar competition. The call underscored the company's commitment to innovation, highlighting plans for significant investments in R&D and manufacturing.

Johnson & Johnson Financial Statement Overview

Summary

Johnson & Johnson demonstrates solid financial performance with strong profitability margins and a stable balance sheet. The company exhibits low financial risk due to low leverage. However, slight declines in revenue growth and free cash flow highlight the need for strategic adjustments to sustain growth and cash generation.

Income Statement

Very Positive

Johnson & Johnson's income statement over the TTM (Trailing-Twelve-Months) shows robust financial health with a gross profit margin of 74.4% and a net profit margin of 26.6%, indicating strong profitability. The EBIT margin stands at 26.8%, and the EBITDA margin is 30.9%, both reflecting efficient operational management. However, the revenue growth rate from the previous year shows a slight decline of 7.7%, which is a potential concern for sustained growth.

Balance Sheet

Positive

The company's balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.18, suggesting low leverage and lower financial risk. The return on equity (ROE) is a healthy 27.9%, indicating effective use of equity. The equity ratio of 40.3% shows a strong capital structure. Despite these strengths, the decrease in stockholders' equity over the periods may need attention.

Cash Flow

Positive

The cash flow statement presents a stable cash generation with a free cash flow of $18.59 billion in the TTM and an operating cash flow to net income ratio of 1.14, indicating strong cash flow management. However, the drop in free cash flow growth by 6.3% compared to the previous year suggests potential challenges in maintaining cash flow levels.

TTM	Dec 2024	Dec 2023	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
89.33B	88.82B	85.16B	79.99B	78.74B	82.58B
	Gross Profit
61.01B	61.35B	58.61B	55.39B	55.34B	54.16B
	EBIT
22.07B	22.15B	23.41B	21.01B	20.94B	19.73B
	EBITDA
34.70B	24.78B	23.32B	26.61B	26.75B	23.93B
	Net Income Common Stockholders
21.81B	14.07B	35.15B	17.94B	20.88B	14.71B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
38.78B	24.52B	22.93B	22.28B	31.61B	25.18B
	Total Assets
193.67B	180.10B	167.56B	187.38B	182.02B	174.89B
	Total Debt
52.25B	36.63B	29.33B	39.64B	33.75B	35.27B
	Net Debt
13.78B	12.53B	7.47B	26.75B	19.26B	21.28B
	Total Liabilities
115.56B	108.61B	98.78B	110.57B	108.00B	111.62B
	Stockholders Equity
78.11B	71.49B	68.77B	76.80B	74.02B	63.28B
Cash Flow		Free Cash Flow
18.57B	19.84B	18.25B	17.18B	19.76B	20.19B
	Operating Cash Flow
24.78B	24.27B	22.79B	21.19B	23.41B	23.54B
	Investing Cash Flow
-18.43B	-18.60B	878.00M	-12.37B	-8.68B	-20.82B
	Financing Cash Flow
6.74B	-3.13B	-15.82B	-8.87B	-14.05B	-6.12B

Johnson & Johnson Technical Analysis

Technical Analysis Sentiment

Positive

Last Price153.25

Price Trends

50DMA

154.52

Negative

100DMA

153.61

Negative

200DMA

154.01

Negative

Market Momentum

MACD

-0.76

Negative

RSI

51.96

Neutral

STOCH

69.48

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 153.25 is above the 20-day moving average (MA) of 152.13, below the 50-day MA of 154.52, and below the 200-day MA of 154.01, indicating a neutral trend. The MACD of -0.76 indicates Negative momentum. The RSI at 51.96 is Neutral, neither overbought nor oversold. The STOCH value of 69.48 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 (53)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AZN	77 Outperform	$219.66B	28.08	19.81%	2.16%	15.48%	22.70%
MRK	76 Outperform	$194.81B	11.29	39.31%	4.07%	4.40%	654.93%
JNJ	76 Outperform	$368.73B	17.04	29.45%	3.24%	-0.37%	29.21%
AMGN	70 Outperform	$146.07B	24.80	105.67%	3.36%	15.59%	56.99%
ABBV	67 Neutral	$323.71B	78.14	88.15%	3.48%	5.45%	-30.21%
PFE	66 Neutral	$132.58B	16.90	8.62%	7.25%	13.38%	―
Sector *	53 Neutral	$5.14B	3.23	-45.01%	2.85%	17.55%	-0.69%

* Healthcare Sector Average

Performance Comparison

JNJ

Johnson & Johnson

153.25

13.37

9.56%

AMGN

Amgen

279.45

-7.66

-2.67%

AZN

AstraZeneca

70.96

-3.62

-4.85%

MRK

Merck & Company

77.59

-44.69

-36.55%

PFE

Pfizer

23.61

-2.47

-9.47%

ABBV

AbbVie

185.72

36.36

24.34%

Johnson & Johnson Corporate Events

Executive/Board ChangesShareholder Meetings

Johnson & Johnson Shareholders Approve 2025 Director Nominees

Neutral

Apr 30, 2025

D. Adamczyk announced his intention to retire from Johnson & Johnson‘s Board of Directors effective May 31, 2025, to join Goldman Sachs as a Partner, citing personal reasons unrelated to any disagreements with the company. At the 2025 Annual Meeting of Shareholders held on April 24, 2025, all 11 Director nominees were elected, executive compensation policies were approved, and PricewaterhouseCoopers LLP was ratified as the independent auditor for 2025. However, proposals on shareholder voting for excessive golden parachutes and a human rights impact assessment were not approved.

Legal ProceedingsFinancial Disclosures

Johnson & Johnson Faces Bankruptcy Plan Rejection

Negative

Apr 3, 2025

On March 31, 2025, Johnson & Johnson announced that the U.S. Bankruptcy Court for the Southern District of Texas denied the request by its subsidiary, Red River Talc LLC, to confirm its proposed prepackaged bankruptcy plan. As a result, the company will reverse approximately $7 billion from amounts previously reserved for the bankruptcy resolution, impacting its financial planning and potentially affecting stakeholders’ expectations.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.