Key Stats for Johnson & Johnson Stock
- Current Price: $247.02
- Target Price (Mid): ~$333
- Street Target: ~$262
- Potential Total Return: ~35%
- Annualized IRR: ~7% / year
- Max Drawdown: 10.96% on 5/8/26
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What Happened?
Johnson & Johnson (JNJ) delivered the quarter it promised on Wednesday, and the stock could not hold it. Revenue of $25.31 billion beat consensus. Adjusted earnings of $2.90 per share beat consensus. Management raised full-year guidance by more than the size of the quarterly beat, the sort of move that usually signals confidence. Shares opened slightly higher, then closed at $247.02, down 2.69%.
What the market chose to weigh sits in the medical device segment. Abiomed, the heart pump franchise J&J acquired in 2022, posted $440 million in sales and declined 2%. That is roughly 1.7% of quarterly revenue and one of 28 platforms generating more than $1 billion a year. Electrophysiology came in soft on a China inventory drag. Analysts also noted the beat itself was modest rather than emphatic.
So the question is proportion. Is a $440 million line item worth repricing a $595 billion company, or did a small miss draw attention to a $101 billion guide that could not?
The Heart Pump Data That Physicians Actually Read
The Abiomed decline is not a demand problem. It is an evidence problem with a specific origin.
On March 29, 2026, the CHIP-BCIS3 trial published in the New England Journal of Medicine. Funded by the U.K. National Institute for Health and Care Research, it randomized 300 patients across 21 U.K. centers to receive Impella support during complex coronary procedures or standard care without it. The finding: elective left ventricular unloading with a microaxial flow pump, meaning a small device that takes over part of the heart’s workload during a procedure, did not reduce major adverse outcomes. Cardiovascular death was higher in the Impella arm.
The business grew at a double-digit rate in the first quarter, according to Reuters, and declined 2% in the second. Management attributes the swing to physician caution rather than anything structural, which is J&J’s reading of its own miss and is worth labeling as such.
Tim Schmid, Executive Vice President and Worldwide Chairman of MedTech, at least did not spin it: “Let me first acknowledge that our Q2 growth is not where you wanted it, and frankly, it’s not where we wanted it. That said, we know what happened, and we know exactly what we’re doing about it.” That matters because the alternative explanation, a broad slowdown in hospital procedure volumes, would be a far worse problem for every device maker. Schmid rejected it directly, noting that surgery, vision, and orthopedics all accelerated in the quarter.
The company’s answer is PROTECT IV, a nearly 1,300-patient study focused specifically on high-risk PCI, which Schmid said reads out in 2027. CFO Joe Wolk has told reporters a large data set arrives in the first half of next year. That is a trial in progress, not a result.
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What $2 Billion in a Single Quarter Actually Bought
While the market weighed $440 million, TREMFYA did $2 billion.
That is J&J’s first $2 billion quarter for the drug, and it grew 71%. The driver is not psoriasis, where TREMFYA has competed for years. It is inflammatory bowel disease. Jennifer Taubert, Executive Vice President and Worldwide Chairman of Innovative Medicine, gave the number that explains the trajectory: in ulcerative colitis, TREMFYA holds 58% induction share among IL-23 inhibitors, and over 50% in Crohn’s disease. Share leadership in new patient starts is what compounding revenue looks like two years early.
Her framing of the opportunity was blunt: “back when we had really STELARA here, over 75% of STELARA sales were actually in IBD. There is absolutely no reason why TREMFYA can’t do that or even more.”
That reference matters because STELARA is why this quarter is impressive rather than routine. Biosimilar erosion, meaning competition from copies of a biologic after patent expiry, took 55.7% off STELARA sales and created a 460 basis point drag on company growth. J&J still grew 5.6% operationally and 6.6% on a reported basis. Excluding STELARA, growth was double digits. STELARA is now 4% of Innovative Medicine.
DARZALEX cleared $4 billion again, growing 17.6% on five points of share gain across all lines of therapy. ICOTYDE, the first oral IL-23 targeted peptide for plaque psoriasis, has 11,000 patients on therapy and 6,000 unique prescribers within roughly four months of launch, with over 50% commercial payer coverage secured. Taubert said that coverage pace is running ahead of internal projections.
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The Guidance Raise Was Bigger Than the Beat
Here is the detail separating this quarter from a routine one.
The revenue beat was roughly $250 million against consensus. Full-year operational sales guidance went up $400 million. Adjusted operational EPS guidance rose $0.18 at the midpoint to a range of $11.50 to $11.65. Management also lifted its adjusted pretax operating margin expansion target to approximately 75 basis points from a prior floor of 50 basis points, citing operating efficiencies and expected recoupment of certain tariff costs based on recent rulings.
Companies do not raise the year by more than they beat the quarter unless they believe the strength persists. Wolk said it plainly: “Even with a notable headwind, we still delivered performance that exceeded your expectations and enabled us to confidently raise our full year 2026 financial outlook.”
Cash flow is the piece still owed. Year-to-date free cash flow reached approximately $8.7 billion after a light first quarter, against a full-year outlook management describes as approaching $21 billion. That is management’s target, not a reported figure, and TIKR’s LTM levered free cash flow of $16.8 billion reflects trailing reality. The second-half weighting has to deliver.
On valuation, JNJ trades at 20.47x NTM P/E, the multiple investors pay per dollar of expected earnings, and 16.57x NTM EV/EBITDA. Against the pharmaceutical peer set on TIKR’s Competitors page, that is a clear premium: Novartis sits at 16.91x NTM P/E, Bristol-Myers Squibb at 9.60x, and Pfizer at 8.74x. Eli Lilly commands 31.80x on its GLP-1 franchise. The premium over Novartis is defensible on growth composition, since Pfizer’s single-digit multiple reflects a business the market does not expect to compound. It is not defensible if the launch portfolio stalls, because at 20x forward earnings against roughly 7% expected revenue growth, the multiple is doing real work.
Talc litigation remains the overhang that the multiple has to carry. The second-quarter other expense of $331 million was driven partly by higher litigation expense, and the matter is unresolved.
TIKR Advanced Model Analysis
- Current Price: $247.02
- Target Price (Mid): ~$333
- Potential Total Return: ~35%
- Annualized IRR: ~7% / year
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TIKR’s mid-case model targets around $333, realized at December 31, 2030, implying roughly 35% total return, or about 7% annualized over the next 4.5 years. The mid case is the right frame because the low case (~5% IRR) and high case (~10% IRR) run the same engine and differ mainly in how fast the launch portfolio compounds.
Two revenue drivers carry the ~7% CAGR assumption: TREMFYA’s IBD expansion, where the drug leads induction share in both ulcerative colitis and Crohn’s, and the oncology franchise led by DARZALEX and RYBREVANT, where management targets more than $50 billion in oncology sales by 2030.
The margin driver is mix. Net income margin expands from 27.8% in 2025 toward around 32% in the mid case as higher-margin Innovative Medicine revenue outgrows MedTech. The primary risk is talc litigation, where an adverse reserve step-up would compress earnings independent of operations.
Upside: TREMFYA reaches STELARA-like IBD penetration while ICOTYDE and INLEXZO each scale toward the $5 billion peak sales management projects.
Downside: PROTECT IV reads out negative in 2027, Abiomed stays impaired, and talc reserves force an earnings reset the 20x forward multiple cannot absorb.
Note that the model prices from the $247.02 entry, below where the stock traded before Wednesday’s print.
Conclusion
The Street is inching, not sprinting. TIKR’s tracked board sits at 10 Buys, 5 Outperforms, 7 Holds, 1 Sell, and 1 with no opinion, with a mean target of around $262. That mean has climbed from around $258 in late June, roughly 6% above Wednesday’s close, from analysts who have now watched four straight quarterly beats and still will not underwrite the launch portfolio.
The number that breaks the tie comes with the third-quarter report this fall. Management is committed to MedTech growing faster in the second half than in the first half, at roughly 4%. If cardiovascular reaccelerates and Abiomed stops declining, Wednesday’s reaction priced a temporary behavioral shift as something more permanent. If Abiomed declines again, the market was early rather than wrong, and PROTECT IV in 2027 becomes the only thing that matters for a franchise the company has spent four years defending.
Watch the Abiomed line. It is a small number carrying more weight than its size suggests.
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Should You Invest in Johnson & Johnson?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
