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Johnson & Johnson (JNJ)
NYSE:JNJ
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Johnson & Johnson
(NYSE:JNJ)
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Rating:79Outperform
Price Target:
$250.00
▲(10.01% Upside)
The score is driven primarily by strong financial fundamentals (high margins, solid balance sheet, and improving free cash flow) and a positive earnings outlook with clear 2026 growth, margin, and cash flow guidance. Technicals add support via a strong uptrend, though elevated RSI/Stoch indicate momentum is stretched. Valuation is reasonable but not distinctly cheap, limiting upside contribution to the score.
Positive Factors
Strong free cash flow generation
Consistent, large free cash flow provides durable funding for R&D, M&A, dividends and the planned orthopedics separation. Strong cash conversion reduces dependence on external financing, supports debt servicing and preserves optionality for strategic investments over the next several years.
Deep, productive innovation pipeline
High R&D throughput and regulatory activity across oncology, immunology and neuroscience materially de-risks future growth. A steady cadence of approvals and late‑stage programs supports multi-year revenue replacement for older products and underpins sustained competitive advantage.
Solid balance sheet and high profitability
Robust margins and a manageable leverage profile give J&J staying power to absorb shocks, fund investments, and pursue portfolio moves like the orthopedics separation. High ROE indicates efficient capital use and supports long-term shareholder returns and operational resilience.
Negative Factors
STELARA biosimilar erosion
Rapid loss of a legacy blockbuster creates a persistent revenue gap that must be filled by new launches and portfolio growth. This structural decline raises execution risk, pressures segment revenues and increases reliance on successful commercialization of pipeline assets over multiple years.
Ongoing litigation and talc uncertainty
Large, unresolved litigation exposures produce unpredictable cash outflows and can divert management time and capital. Multiyear legal uncertainty complicates capital allocation, could constrain buybacks/dividends or M&A, and elevates downside risk to balance sheet flexibility.
Structural MedTech tariff headwind
Sustained tariff costs materially raise COGS for MedTech products, compressing margins unless offset by price or efficiency gains. Tariff-driven cost pressure is a structural policy risk that can reduce long‑run segment profitability and require prolonged investment in supply‑chain adjustments.
Johnson & Johnson (JNJ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$547.51B
Dividend Yield2.5%
Average Volume (3M)7.46M
Price to Earnings (P/E)20.6
Beta (1Y)0.11
Revenue Growth6.05%
EPS GrowthN/A
CountryUS
Employees138,100
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)2.46
Shares Outstanding2,409,295,200
10 Day Avg. Volume9,365,448
30 Day Avg. Volume7,455,599
Financial Highlights & Ratios
PEG Ratio-0.42
Price to Book (P/B)4.83
Price to Sales (P/S)3.88
P/FCF Ratio17.39
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue6.24
Enterprise Value/Gross Profit9.17
Enterprise Value/Ebitda14.54
Forecast
1Y Price Target
$241.75Price Target Upside6.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)11.58
Revenue Forecast (FY)$100.23B
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
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.
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.
Data provided by:
The Fly
The FlyJohnson & 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
Strong profitability (TTM gross margin 68.08%, net margin 27.26%) and robust operating efficiency (EBIT margin 34.91%, EBITDA margin 40.00%) supported by positive revenue growth (TTM +2.24%). Balance sheet is solid (debt-to-equity 0.65; equity ratio 41.11%; ROE 33.69%) and cash generation is strong (TTM free cash flow growth +23.07%), though rising debt, net margin decline versus prior years, and weaker operating cash flow coverage versus previous years temper the score.Income Statement
Johnson & Johnson's income statement shows strong profitability with a high gross profit margin of 68.08% and a net profit margin of 27.26% for the TTM. The company has maintained steady revenue growth, with a 2.24% increase in the TTM. EBIT and EBITDA margins are robust at 34.91% and 40.00%, respectively, indicating efficient operations. However, the net profit margin has decreased from previous years, which could be a concern if the trend continues.85
Very Positive
Balance Sheet
The balance sheet reflects a solid financial position with a manageable debt-to-equity ratio of 0.65. The return on equity is impressive at 33.69%, showcasing effective use of shareholder funds. The equity ratio stands at 41.11%, indicating a stable capital structure. However, the increase in total debt over the years requires monitoring to ensure it does not impact financial flexibility.80
Positive
Cash Flow
Cash flow analysis reveals a healthy free cash flow growth rate of 23.07% in the TTM, demonstrating strong cash generation capabilities. The operating cash flow to net income ratio is 0.43, and the free cash flow to net income ratio is 0.71, indicating efficient cash conversion. Despite the positive cash flow metrics, the decline in operating cash flow coverage ratio compared to previous years suggests potential areas for improvement in cash management.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 92.15B | 88.82B | 85.16B | 79.99B | 78.74B | 82.58B |
| Gross Profit | 62.73B | 61.35B | 58.61B | 55.39B | 55.34B | 54.16B |
| EBITDA | 39.56B | 24.78B | 23.32B | 26.61B | 26.75B | 23.93B |
| Net Income | 25.12B | 14.07B | 35.15B | 17.94B | 20.88B | 14.71B |
Balance Sheet | ||||||
| Total Assets | 192.82B | 180.10B | 167.56B | 187.38B | 182.02B | 174.89B |
| Cash, Cash Equivalents and Short-Term Investments | 18.56B | 24.52B | 22.93B | 22.28B | 31.61B | 25.18B |
| Total Debt | 45.80B | 36.63B | 29.33B | 39.64B | 33.75B | 35.27B |
| Total Liabilities | 113.54B | 108.61B | 98.78B | 110.57B | 108.00B | 111.62B |
| Stockholders Equity | 79.28B | 71.49B | 68.77B | 76.80B | 74.02B | 63.28B |
Cash Flow | ||||||
| Free Cash Flow | 19.06B | 19.84B | 18.25B | 17.18B | 19.76B | 20.19B |
| Operating Cash Flow | 24.20B | 24.27B | 22.79B | 21.19B | 23.41B | 23.54B |
| Investing Cash Flow | -20.42B | -18.60B | 878.00M | -12.37B | -8.68B | -20.82B |
| Financing Cash Flow | -5.51B | -3.13B | -15.82B | -8.87B | -14.05B | -6.12B |
Johnson & Johnson Technical Analysis
Positive
227.25
Price Trends
209.92
Positive
197.51
Positive
178.16
Positive
Market Momentum
5.39
Negative
77.20
Negative
89.10
Negative
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 227.25 is above the 20-day moving average (MA) of 215.86, above the 50-day MA of 209.92, and above the 200-day MA of 178.16, indicating a bullish trend. The MACD of 5.39 indicates Negative momentum. The RSI at 77.20 is Negative, neither overbought nor oversold. The STOCH value of 89.10 is Negative, 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $273.69B | 14.59 | 39.51% | 3.12% | 1.59% | 58.02% | |
80 Outperform | $282.32B | 20.13 | 32.93% | 2.87% | 11.53% | -15.21% | |
79 Outperform | $547.51B | 20.60 | ― | 2.50% | 6.05% | ― | |
79 Outperform | $288.79B | 30.56 | 21.73% | 1.70% | 12.96% | 44.29% | |
69 Neutral | $113.91B | 13.02 | 6.76% | 4.58% | -9.32% | 120.62% | |
66 Neutral | $394.14B | 168.27 | 138.53% | 2.87% | 7.40% | -53.78% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
JNJ
Johnson & Johnson
227.25
79.89
54.21%
AZN
AstraZeneca
92.77
24.34
35.57%
MRK
Merck & Company
110.27
14.10
14.66%
NVS
Novartis
148.68
46.31
45.23%
SNY
Sanofi
47.04
-4.66
-9.02%
ABBV
AbbVie
223.01
39.04
21.22%
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.