Johnson & Johnson (JNJ) shares opened down about 4% on Tuesday, October 13, even though the company beat third-quarter estimates and raised its 2026 outlook. Sales rose 5.9% to $25.40 billion, and adjusted EPS of $2.59 topped the $2.53 consensus.
GAAP EPS was just $0.09. A $5.52 billion pretax litigation charge, tied mainly to J&J’s $5.5 billion offer to settle remaining ovarian talc claims, wiped out most of the quarter’s profit. That deal still needs 95% of claimants to opt in, and J&J would pay no more than $3 billion of it in 2027.
J&J’s MedTech Growth Is Fading
J&J classified the talc charge as a one-time item. The device slowdown could persist. MedTech revenue grew 7.7% from a year earlier in the first quarter of 2026, then 4.6% in the second, and just 2.5% this quarter, to $8.64 billion. Sales also fell from $8.93 billion in the second quarter.
CFO Joe Wolk pointed to Middle East disruption, European budget cuts and pricing pressure in China. Abiomed’s Impella heart pumps stayed weak too.
Pharma carried the quarter instead, with sales up 7.7% to $16.76 billion, led by Tremfya. Pharma now makes up about two-thirds of J&J’s sales.
What Matters More for J&J Stock
The guidance raise is small: the sales midpoint moved to $101.2 billion from $101.1 billion, and adjusted EPS to $11.10 from $11.04. That’s not enough to offset a growth engine that has slowed two quarters in a row. Until MedTech growth turns back up, J&J is a pharma story with a slowing device business attached, and today’s drop reflects that.
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