Johnson & Johnson's (JNJ) -) stock hasn't performed as well as the broader stock market this year because of concerns lawsuits over its talc-based products could cost it billions. However, investors have grown increasingly optimistic lately. Shares have rallied 12% since their March lows, including an impressive 5% rally on July 20 following its second-quarter earnings report.
The heavy volume positive reaction to its earnings catapulted shares above its key 200-day moving average.
Can J&J's stock continue climbing, or has it seen its highs for this year?
Johnson & Johnson's Financials Remain Solid
The healthcare giant reported second-quarter revenue rose 6.3% to $25.5 billion, topping Wall Street's $24.6 billion estimate. The company's earnings also outpaced forecasts, coming in at $2.80. Analysts expected just $2.62.
The performance was supported by solid demand for medical devices and pharmaceuticals, which grew 13% and 3% from one year ago.
International pharmaceutical sales fell, but U.S. drug sales increased by 9%. Worldwide, the company hauled in $13.7 billion from pharmaceuticals. Oncology was the best performer, thanks partly to a nearly 30% increase in sales of the multiple myeloma drug, Darzalex. Darzalex revenue totaled $2.4 billion, representing over half the company's $4.4 billion in cancer drug sales.
Medtech sales were similarly strong in the U.S., rising by 14.6%, while overseas sales slipped by 0.5%. Total MedTech revenue was $7.8 billion. Surgery, vision, and orthopedics revenue rose 5.9%, 5.4%, and 5%. Interventional solutions revenue totaled $1.6 billion, up 54.4%, mainly because of the company's acquisition of Abiomed.
The company also reported 5.4% global growth for its former consumer health division, which was spun off earlier this year as Kenvue (KVUE).
Johnson & Johnson's Stock Chart Results In A New Price Target
Technical analysis offers insight into the aggregate sentiment of every investor, including major money managers, with access to resources individual investors can only imagine.
Investors often identify stocks likely to rise or fall early by charting price action. Technical analysis can also be used to calculate price targets, particularly if you use point-and-figure charts like Real Money technical analyst Bruce Kamich.
Kamich's been evaluating charts for professionals for over forty years. Recently, he reviewed Johnson & Johnson's charts for clues to what may happen next.
After considering the stock’s price action, volume trends, and momentum, he used the daily and weekly point-and-figure charts to calculate price targets. Kamich was impressed.
"In the weekly Japanese candlestick chart of JNJ, below, I see promise. The shares are trading below the 40-week moving average line, but that is not the whole story. I can see lower shadows at the three lows from March to May to July, and this tells me that traders are rejecting the lows," writes Kamich. "The weekly OBV line is firming. The MACD oscillator shows improvement from a low in March -- it is a start.
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According to the daily point-and-figure chart, Kamich calculates Johnson & Johnson's price target of $191. The weekly chart calculates a higher target of $215, up 28%.
If shares reach those targets, it would represent gains of 13% and 28%, respectively. That would be a healthy and potentially surprising return for Johnson & Johnson shareholders, given its tepid performance earlier this year.
