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1. Company Snapshot

1.a. Company Description

Johnson & Johnson, together with its subsidiaries, researches and develops, manufactures, and sells various products in the healthcare field worldwide.The company's Consumer Health segment offers baby care products under the JOHNSON'S and AVEENO Baby brands; oral care products under the LISTERINE brand; skin health/beauty products under the AVEENO, CLEAN & CLEAR, DR.CI:LABO, NEUTROGENA, and OGX brands; TYLENOL acetaminophen products; SUDAFED cold, flu, and allergy products; BENADRYL and ZYRTEC allergy products; MOTRIN IB ibuprofen products; NICORETTE smoking cessation products; and PEPCID acid reflux products.


It also offers STAYFREE and CAREFREE sanitary pads; o.b. tampons; adhesive bandages under the BAND-AID brand; and first aid products under the NEOSPORIN brand.It serves general public, retail outlets, and distributors.The company's Pharmaceutical segment offers products for rheumatoid arthritis, psoriatic arthritis, inflammatory bowel disease, and psoriasis; HIV/AIDS and COVID-19 infectious diseases; mood disorders, neurodegenerative disorders, and schizophrenia; prostate cancer, hematologic malignancies, lung cancer, and bladder cancer; thrombosis, diabetes and macular degeneration; and pulmonary arterial hypertension.


This segment serves retailers, wholesalers, distributors, hospitals, and healthcare professionals directly for prescription use.Its MedTech segment provides electrophysiology products to treat cardiovascular diseases; neurovascular care products to treat hemorrhagic and ischemic stroke; orthopaedics products in support of hips, knees, trauma, spine, sports, and other; advanced and general surgery solutions that focus on breast aesthetics, ear, nose, and throat procedures; and disposable contact lenses and ophthalmic products related to cataract and laser refractive surgery under the ACUVUE brand.This segment serves wholesalers, hospitals, and retailers.


The company was founded in 1886 and is based in New Brunswick, New Jersey.

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1.b. Last Insights on JNJ

Johnson & Johnson's recent performance is driven by strong Q3 2025 results, with robust sales growth and raised full-year 2025 revenue guidance. The company's acquisition of Intra-Cellular Therapies and FDA approval of CAPLYTA for major depressive disorder unlock a large market opportunity. Additionally, oncology portfolio strength is highlighted by DARZALEX FASPRO's expanded FDA indication and CARVYKTI's 83% year-over-year revenue growth. MedTech sales also rose 5.6% in Q3, fueled by cardiovascular strength. JNJ remains a "buy" rating as cited by some analyst.

1.c. Company Highlights

2. Johnson & Johnson's Strong Q3 Earnings: A Closer Look

Johnson & Johnson reported strong third-quarter results, with operational sales growth of 5.4% across its business, reaching $24 billion in sales. The company's Innovative Medicine segment saw 5.3% operational sales growth, despite a 10.7% headwind from STELARA, with sales of $15 billion. Net earnings were $5.2 billion, with diluted earnings per share of $2.12, and adjusted diluted earnings per share of $2.8, up 15.7% from the previous year, beating analyst estimates of $2.76.

Publication Date: Oct -16

📋 Highlights
  • Operational Sales Growth:: Johnson & Johnson achieved 5.4% operational sales growth in Q3, with $24 billion in sales, driven by strong performance in oncology and MedTech segments.
  • MedTech Segment Performance:: MedTech sales rose 5.6% to $8.4 billion, led by 12% growth in cardiovascular and 20.9% surge in Shockwave's offerings.
  • Oncology Portfolio Growth:: The oncology segment grew nearly 20%, with DARZALEX up 19.9% and CARVICTI surging 81.4% in revenue.
  • Orthopedic Separation:: The company plans to spin off DePuy Synthes (Ortho) in 18–24 months, aiming to enhance focus on core growth areas and boost shareholder value.
  • Free Cash Flow & Guidance:: Generated $14 billion in free cash flow YTD, with adjusted EPS guidance raised to $10.85 (8.7% growth midpoint) and $55 billion in U.S. investment over four years.

Segment Performance

The company's oncology portfolio grew nearly 20%, driven by DARZALEX, which saw 19.9% growth, and CARVICTI, which grew 81.4%. Immunology sales were impacted by STELARA's decline, but TREMFYA showed strong growth of 40.1%. MedTech sales increased 5.6% to $8.4 billion, driven by cardiovascular, surgery, and vision. As Joaquin Duato emphasized, "J&J does not need large M&A to deliver high-end growth targets, and its priority is to fuel pipeline and portfolio growth."

Guidance and Outlook

The company updated its 2025 guidance and provided qualitative considerations for 2026. Johnson & Johnson is increasing its operational sales guidance and expects adjusted EPS of $10.85, or 8.7% at the midpoint. The company is planning to separate its Orthopedics business, which is expected to enhance the strategic and operational focus of each company and drive value for shareholders.

Valuation and Metrics

With a P/E Ratio of 18.48 and an EV/EBITDA of 13.04, Johnson & Johnson's valuation appears reasonable. The company's ROE of 33.69% and ROIC of 12.72% indicate strong profitability. The Dividend Yield of 2.66% provides a stable income stream. Analysts estimate next year's revenue growth at 5.1%, which is slightly lower than the company's expected growth rate.

Product Pipeline

The company has a broad development program for its new products, including Inlexo for bladder cancer and icropinra for plaque psoriasis. Johnson & Johnson expects to launch several new products in the coming years, including Shockwave C2 Aero Coronary IVL Catheter and Technis Pure C intraocular lens in the U.S. in 2026.

Separation of Orthopedics Business

The separation of Ortho is expected to increase top-line growth and margins for both Johnson & Johnson and the standalone Ortho company. The company expects the separation to be completed within 18 to 24 months and will be a tax-free separation for U.S. federal income tax purposes.

3. NewsRoom

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Johnson & Johnson (JNJ) Stock Drops Despite Market Gains: Important Facts to Note

Dec -04

Source:

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The Dividend Stocks That Keep Paying Even When Markets Stumble

Dec -04

Source: 247wallst.com

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3 Large Drug Stocks to Watch as the Industry Shows Some Recovery

Dec -04

Source: zacks.com

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Edgestream Partners L.P. Sells 63,615 Shares of Johnson & Johnson $JNJ

Dec -04

Source: defenseworld.net

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Johnson & Johnson (JNJ) Presents at Citi Annual Global Healthcare Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

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3 Dividend Stocks Wall Street is Piling Into Before 2026

Dec -02

Source: 247wallst.com

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JNJ Gets EU Nod for Imaavy in Generalized Myasthenia Gravis

Dec -02

Source: zacks.com

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Brandes Investment Partners LP Purchases 8,502 Shares of Johnson & Johnson $JNJ

Dec -02

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.20%)

6. Segments

Innovative Medicine

Expected Growth: 4.5%

This segment is expected to grow at a slightly higher rate than the global growth hypothesis due to the increasing demand for innovative treatments and the strong pipeline of products in development.

Medtech

Expected Growth: 4.0%

This segment is expected to grow at a rate slightly lower than the global growth hypothesis due to the increasing competition in the medical devices market and the need for continuous innovation to stay ahead.

7. Detailed Products

Band-Aids

Adhesive bandages for wound care

Acuvue Contact Lenses

Daily disposable contact lenses for vision correction

Tylenol

Pain relief medication for headaches and fever reduction

Motrin

Pain relief medication for arthritis and menstrual cramps

Neutrogena Skincare

Skincare products for cleansing, moisturizing, and protecting the skin

Depend Adult Incontinence Products

Adult incontinence products for bladder control

Sudafed

Decongestant medication for relieving nasal congestion

Zytiga

Medication for treating prostate cancer

Xarelto

Medication for preventing stroke and blood clots

Invega

Medication for treating schizophrenia and bipolar disorder

8. Johnson & Johnson's Porter Forces

Forces Ranking

Threat Of Substitutes

Johnson & Johnson has a diverse product portfolio, which reduces the threat of substitutes. However, the company faces competition from generic and biosimilar products, which could erode its market share.

Bargaining Power Of Customers

Johnson & Johnson's customers, including hospitals and pharmacies, have limited bargaining power due to the company's strong brand reputation and diversified product offerings.

Bargaining Power Of Suppliers

Johnson & Johnson relies on a network of suppliers for raw materials and components. While the company has some bargaining power, suppliers of critical components may have some negotiating power.

Threat Of New Entrants

The pharmaceutical and medical device industries have high barriers to entry, including significant R&D investments and regulatory hurdles, which limits the threat of new entrants.

Intensity Of Rivalry

The pharmaceutical and medical device industries are highly competitive, with many established players vying for market share. Johnson & Johnson faces intense competition from companies like Pfizer, Merck, and Medtronic.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 29.90%
Debt Cost 4.63%
Equity Weight 70.10%
Equity Cost 6.68%
WACC 6.07%
Leverage 42.65%

11. Quality Control: Johnson & Johnson passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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AbbVie

A-Score: 6.6/10

Value: 3.0

Growth: 4.7

Quality: 7.5

Yield: 7.0

Momentum: 8.5

Volatility: 9.0

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Gilead Sciences

A-Score: 6.5/10

Value: 3.3

Growth: 3.0

Quality: 8.6

Yield: 7.0

Momentum: 9.0

Volatility: 8.3

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J&J

A-Score: 6.4/10

Value: 3.0

Growth: 4.0

Quality: 7.7

Yield: 6.0

Momentum: 8.0

Volatility: 10.0

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Merck

A-Score: 5.9/10

Value: 4.8

Growth: 6.2

Quality: 7.8

Yield: 7.0

Momentum: 1.5

Volatility: 8.3

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Bristol-Myers Squibb

A-Score: 5.6/10

Value: 5.0

Growth: 3.9

Quality: 6.4

Yield: 8.0

Momentum: 2.0

Volatility: 8.3

1-Year Total Return ->

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Amgen

A-Score: 5.4/10

Value: 2.9

Growth: 5.2

Quality: 6.8

Yield: 6.0

Momentum: 3.0

Volatility: 8.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

201.93$

Current Price

201.93$

Potential

-0.00%

Expected Cash-Flows