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New Brunswick, New Jersey-based Johnson & Johnson (JNJ) researches, develops, manufactures, and sells various healthcare products for the consumer, pharmaceutical, and medical devices and diagnostics markets. With a market cap of $397.1 billion, the company sells products such as skin and hair care products, acetaminophen products, pharmaceuticals, diagnostic equipment, and surgical equipment.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and JNJ definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the general drug manufacturers industry. By focusing on developing innovative medicines and medical technologies, the healthcare giant solidifies its role as a leader in innovation.
Despite its notable strengths, JNJ slipped 2.3% from its 52-week high of $168.85, achieved on Sep. 4. Over the past three months, JNJ stock gained 13%, outperforming the S&P 500 Index’s ($SPX) 2.8% gains during the same time frame.
In the longer term, shares of JNJ rose 5.3% on a YTD basis and climbed 2.7% over the past 52 weeks, underperforming SPX’s YTD gains of 15.4% and solid 22.4% returns over the last year.
However, JNJ has traded above its 50-day and 200-day moving averages since July, indicating a recent bullish trend.
The overall performance of JNJ has been affected by years of litigation over consumer claims regarding its baby talc, with the company denying these claims. Additionally, the company is facing the loss of exclusivity for one of its key drugs, Stelara, which could impact its profitability.
However, on Jul. 17, JNJ shares closed up more than 3% after reporting its Q2 earnings result. Its adjusted EPS of $2.82 beat Wall Street forecasts of $2.71. Its revenue was $22.5 billion, topping Wall Street forecasts of $22.3 billion.
In the competitive arena of general drug manufacturers, Eli Lilly and Company (LLY) has taken the lead over JNJ, showing resilience with a 56.6% uptick on a YTD basis and solid 63.5% gains over the past 52 weeks.
Despite the grim price action, Wall Street analysts are moderately bullish on JNJ’s prospects. The stock has a consensus “Moderate Buy” rating from the 20 analysts covering it, and the mean price target of $171.26 suggests a potential upside of 3.8% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
