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Valued at a market cap of $348.2 billion, Johnson & Johnson (JNJ) researches, develops, manufactures, and sells various products in the healthcare field and operates through pharmaceuticals, medical devices, and consumer products divisions. The New Brunswick, New Jersey-based company has one of the largest research and development (R&D) budgets among pharma companies. It is scheduled to announce its fiscal Q4 earnings results before the market opens on Wednesday, Jan. 22.
Ahead of this event, analysts expect the healthcare giant to report a profit of $2 per share, down 12.7% from $2.29 per share in the year-ago quarter. The company has consistently beaten Wall Street's bottom-line estimates in the last four quarters. Its adjusted earnings of $2.42 per share in the last reported quarter outpaced the forecasted figure by 9%.
For fiscal 2024, analysts project JNJ to report an EPS of $9.94, up marginally from $9.92 in fiscal 2023. Moreover, in fiscal 2025, EPS is expected to grow 6.1% year-over-year to $10.55.
Shares of JNJ have declined 10% over the past 52 weeks, significantly lagging behind both the S&P 500 Index's ($SPX) 23.7% gain and the Health Care Select Sector SPDR Fund’s (XLV) marginal decline over the same period.
Slowing sales of J&J’s MedTech segment, especially in China, the upcoming patent expiration of its blockbuster drug, Stelara, and more than 62,000 talc-related legal issues faced by the company have contributed to its weak performance over the past 52 weeks.
Nevertheless, on Oct. 15, shares of JNJ rose 1.5% after the company released its better-than-expected Q3 earnings of $2.42 per share and revenues of $22.5 billion. Robust growth in JNJ’s innovative medicine unit sales primarily due to a 22.9% annual growth in its Darzalex revenues and a significant 87.6% year-over-year rise in its cancer cell therapy, Carvykti sales led to a 5.2% annual increase in its top-line figure. However, its adjusted EPS declined 9% from the year-ago quarter primarily due to a $1.3 billion expense related to NM26 bispecific antibody and talc litigation settlements. Following its Q3 performance, the company raised its full-year 2024 revenue expectations to a range of $88.4 billion to $88.8 billion.
Wall Street analysts are moderately optimistic about Johnson & Johnson’s stock, with a "Moderate Buy" rating overall. Among 22 analysts covering the stock, eight recommend "Strong Buy," two suggest "Moderate Buy," and 12 indicate “Hold.” This configuration is slightly more bullish than three months ago, with seven analysts suggesting a "Strong Buy." The mean price target for JNJ is $175.83, which indicates a 22.1% potential upside from the current levels.
