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Johnson & Johnson
(NYSE:JNJ)
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Rating:77Outperform
Price Target:
$289.00
▲(9.72% Upside)
Action:Reiterated
Date:08/04/26
The score is driven primarily by strong financial quality (high margins, low leverage, solid free cash flow) and a generally upbeat earnings outlook with raised guidance and improving margin expectations. Offsetting factors are a premium valuation (high P/E), mixed near-term technical momentum, and notable business headwinds led by the sharp STELARA decline and pockets of MedTech softness.
Positive Factors
High Profitability and Margin Sustainability
Johnson & Johnson’s trailing‑12‑month gross, operating and net margins are very strong, reflecting durable pricing power, efficient cost structure, and scale across pharmaceuticals and MedTech. High core margins support sustained R&D investment, product launches, and long‑term cash returns to stakeholders.
Negative Factors
STELARA Biosimilar Impact and Legacy Product Decline
A >50% decline in a legacy biologic demonstrates how biosimilar entry and therapeutic class shifts can rapidly erode material revenue streams. Replacing that cash flow requires successful new launches and sustained uptake, creating revenue volatility over multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
High Profitability and Margin Sustainability
Johnson & Johnson’s trailing‑12‑month gross, operating and net margins are very strong, reflecting durable pricing power, efficient cost structure, and scale across pharmaceuticals and MedTech. High core margins support sustained R&D investment, product launches, and long‑term cash returns to stakeholders.
Read all positive factors
Johnson & Johnson Key Performance Indicators (KPIs)
Any
Revenue by Geography
Shows how much of the company’s revenue is generated in each part of the world, highlighting whether growth is driven by mature markets or expanding international demand. Helpful for spotting concentration risk, the impact of new product launches abroad, and regions where patent expiries or regulatory changes could dent sales.
Shows how much of the company’s revenue is generated in each part of the world, highlighting whether growth is driven by mature markets or expanding international demand. Helpful for spotting concentration risk, the impact of new product launches abroad, and regions where patent expiries or regulatory changes could dent sales.
Data provided by:
The Fly
The FlyJohnson & Johnson (JNJ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$628.65B
Dividend Yield2%
Average Volume (3M)8.54M
Price to Earnings (P/E)30.3
Beta (1Y)-0.01
Revenue Growth8.07%
EPS Growth-7.21%
CountryUS
Employees141,700
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)8.65
Shares Outstanding2,409,898,700
10 Day Avg. Volume8,523,926
30 Day Avg. Volume8,542,877
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$283.69Price Target Upside7.70% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)11.59
Revenue Forecast (FY)$101.27B
Johnson & Johnson Business Overview & Revenue Model
Company Description
Johnson & Johnson is a holding company, which engages in the research, development, manufacture, and sale of products in the healthcare field. It operates through the Innovative Medicine and MedTech segments. The Innovative Medicine segment focuse...
How the Company Makes Money
Johnson & Johnson makes money by generating revenue from the sale of healthcare products in two main segments: Pharmaceuticals and MedTech. In Pharmaceuticals, the company earns revenue primarily from prescription drug sales, typically through a c...
Johnson & Johnson Earnings Call Summary
Earnings Call Date:Jul 15, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 20, 2026
Earnings Call Sentiment Positive
The call was broadly positive: the company reported solid top‑line growth, strong performance from a broad set of Innovative Medicine launches (many products delivering high double‑digit growth), successful new product launches (ICOTYDE, INLEXZO), raised guidance for full‑year sales and EPS, and improved operating margin expectations. Headwinds exist — notably STELARA's steep decline, MedTech pressure in cardiovascular/Abiomed, regional inventory impacts (China), higher other expenses and a higher GAAP tax rate — but management characterized these as addressable and emphasized diversified, multi‑product strength, cash flow recovery, and upcoming pipeline and regulatory catalysts.Positive Updates
Strong Q2 Revenue and Raised Full‑Year Guidance
Worldwide sales of $25.3 billion; operational sales growth of 5.6% in Q2. Company raised full‑year 2026 operational sales growth guidance to 6.5%–7.1% (midpoint $100.6B) and reported sales growth guidance to 7.0%–7.6% (midpoint $101.1B).
Negative Updates
STELARA Decline and Headwind
STELARA sales declined 55.7% YoY due to biosimilar competition, novel class adoption, and unfavorable patient mix. STELARA represented an approximate 460 basis point headwind to overall worldwide sales and ~760 bps headwind to Innovative Medicine growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Q2 Revenue and Raised Full‑Year Guidance
Worldwide sales of $25.3 billion; operational sales growth of 5.6% in Q2. Company raised full‑year 2026 operational sales growth guidance to 6.5%–7.1% (midpoint $100.6B) and reported sales growth guidance to 7.0%–7.6% (midpoint $101.1B).
Read all positive updates
Company Guidance
Management raised full‑year 2026 guidance, increasing operational sales guidance by $400 million and now expecting operational sales growth of 6.5%–7.1% (midpoint revenue ~$100.6B) and reported sales growth of 7.0%–7.6% (midpoint revenue ~$101.1B, ~7.3%), with an estimated −$100M FX impact and roughly a 100‑basis‑point benefit from the 53rd week; they also now expect about a 75‑basis‑point improvement in adjusted pre‑tax operating margin. Other P&L and cash metrics include projected net interest expense of $250M–$300M, an effective tax rate of 17.0%–18.0%, adjusted operational EPS of $11.50–$11.65 (midpoint +$0.18, +7.3% YoY), reported EPS of $11.60–$11.75 (midpoint $11.68, +8.2% YoY, including a $0.05 reduction of favorable currency vs prior guidance), free cash flow on track to approach ~$21B (YTD ~$8.7B), cash & marketable securities of ~$21B, total debt of ~$49B and net debt of ~$28B; outlook excludes the impact of pending acquisitions such as Firefly Bio.Johnson & Johnson Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
86
Very Positive
Cash Flow
80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 97.93B | 94.19B | 88.82B | 85.16B | 79.99B | 78.74B |
| Gross Profit | 68.99B | 68.56B | 61.35B | 58.61B | 55.39B | 55.34B |
| EBITDA | 33.73B | 41.05B | 24.78B | 23.32B | 26.61B | 26.75B |
| Net Income | 21.04B | 26.80B | 14.07B | 35.15B | 17.94B | 20.88B |
Balance Sheet | ||||||
| Total Assets | 201.06B | 199.21B | 180.10B | 167.56B | 187.38B | 182.02B |
| Cash, Cash Equivalents and Short-Term Investments | 20.76B | 20.10B | 24.52B | 22.93B | 22.28B | 31.61B |
| Total Debt | 49.04B | 47.93B | 36.63B | 29.33B | 39.64B | 33.75B |
| Total Liabilities | 116.09B | 117.67B | 108.61B | 98.78B | 110.57B | 108.00B |
| Stockholders Equity | 84.97B | 81.54B | 71.49B | 68.77B | 76.80B | 74.02B |
Cash Flow | ||||||
| Free Cash Flow | 18.71B | 19.70B | 19.84B | 18.25B | 17.18B | 19.76B |
| Operating Cash Flow | 23.70B | 24.53B | 24.27B | 22.79B | 21.19B | 23.41B |
| Investing Cash Flow | -7.18B | -23.59B | -18.60B | 878.00M | -12.37B | -8.68B |
| Financing Cash Flow | -25.15B | -5.54B | -3.13B | -15.82B | -8.87B | -14.05B |
Johnson & Johnson Risk Analysis
Johnson & Johnson disclosed 23 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $628.65B | 30.30 | 25.73% | 1.99% | 8.07% | -7.21% | |
69 Neutral | $104.35B | 23.37 | 5.52% | 5.58% | 23.68% | -30.90% | |
68 Neutral | $279.28B | 23.07 | 29.64% | 3.06% | 2.33% | -4.08% | |
66 Neutral | $327.94B | 107.58 | 6.60% | 2.56% | 4.51% | -80.62% | |
66 Neutral | £181.48B | 23.51 | 21.68% | 1.86% | 4.71% | 21.16% | |
64 Neutral | $439.59B | 70.68 | -136.50% | 2.63% | 10.39% | 68.16% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
JNJ
Johnson & Johnson
260.35
87.03
50.21%
MRK
Merck & Company
135.84
54.36
66.71%
NVS
Novartis
150.88
29.05
23.85%
SNY
Sanofi
43.72
-4.14
-8.65%
ABBV
AbbVie
249.46
48.99
24.44%
GB:AZN
AstraZeneca
11,460.00
62.75
0.55%
Johnson & Johnson Corporate Events
Business Operations and StrategyExecutive/Board Changes
Johnson & Johnson announces leadership change in Innovative Medicine
Positive
Aug 4, 2026
On August 4, 2026, Johnson Johnson announced that Jennifer Taubert will retire as Executive Vice President and Worldwide Chairman of Innovative Medicine, effective September 1, 2026, after more than 21 years at the company. Under her leadership, ...
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Johnson & Johnson Updates Guidance After Firefly, Sail Deals
Negative
Jul 29, 2026
On July 29, 2026, Johnson Johnson completed its $1 billion cash acquisition of Firefly Bio, Inc., gaining the Firelink degrader antibody conjugate platform to enhance its oncology portfolio and capabilities in targeting KRAS-driven and other diff...
Business Operations and StrategyLegal Proceedings
Johnson & Johnson Proposes Major Ovarian Talc Settlement
Positive
Jul 28, 2026
Johnson Johnson on July 27, 2026, announced a proposed comprehensive resolution of its remaining ovarian talc litigation with plaintiff firms leading the federal Multi-District Litigation and related state cases, contingent on at least 95% of out...
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.