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J&J's (JNJ) Stock Outperforms Industry YTD: Here's Why
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J&J’s (JNJ - Free Report) shares have outperformed the industry this year. The stock has risen 1.1% this year so far against a decline of 2.7% for the industry. Here we discuss a few reasons that have driven the stock this year so far.
J&J’s Pharma unit is performing at above-market levels, supported by its blockbuster drugs, Darzalex and Stelara, and contribution from newer drugs, Erleada and Tremfya. Meanwhile, other core products like Simponi/Simponi Aria and Invega Sustenna are also contributing to growth. J&J’s Pharmaceutical segment sales rose 6.3% year over year to $12.9 billion in the first quarter of 2022, reflecting 9.3% operational growth.
J&J continues to expect its Pharmaceutical business to deliver market-leading sales growth in 2022, driven by drugs like Darzalex, Tremfya, Stelara, Erleada and the newly launched Rybrevant.
Sales in J&J’s MedTech segment improved in the first quarter, driven by a faster-than-expected market recovery, better commercial execution and new product launches. J&J saw a steady uptick in surgical procedures in the first quarter with the easing of COVID restrictions in several countries. In the MedTech segment, J&J expects continued market recovery and uptake from recently launched products. Second-half sales of the MedTech unit are expected to be stronger than the first half.
Sales in J&J’s Consumer unit are being hurt by external supply constraints. In the Consumer segment, J&J expects the supply constraints and inflationary pressure to continue to linger throughout the remainder of 2022. However, the impact is expected to be more pronounced in the first half of the year. Second-half sales are expected to be stronger than the first half.
J&J is also making rapid progress with its pipeline and line extensions. It gained FDA approval for its BCMA-directed CAR-T cell therapy, Carvykti (ciltacabtagene autoleucel) for previously treated, relapsed or refractory multiple myeloma in February. An FDA decision on teclistamab for relapsed or refractory multiple myeloma and an EU decision on ciltacabtagene autoleucel is expected this year. Several pivotal data readouts are also expected in 2022.
J&J also plans to take a more aggressive stance for M&A activity as it expects its strong cash position to help it pursue tuck-in M&As to grow its business.
Conclusion
J&J faces its share of challenges. Sales of its single-shot COVID-19 vaccine have been below expectations due to global surplus supply and demand uncertainty. The FDA also limited the use of J&J’s vaccine to adults (18 and older) for whom other COVID-19 vaccines are not accessible or clinically appropriate. Other headwinds like generic competition and pricing pressure continue. Though J&J has taken meaningful steps to resolve its talc and opioid litigation in 2022, it continues to remain an overhang on the stock.
Nonetheless, better sales trends in its Pharmaceutical and Medical Devices units, continued pipeline success, and rapid progress toward the resolution of litigation issues should keep the stock afloat through the rest of the year.
The Zacks Consensus Estimate for Sesen Bio’s2022 loss has declined from 33 cents to 32 cents per share in the past 60 days. Shares of SESN have risen 30.4% in the past three months.
Earnings of Sesen Bio beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 69.9%.
The Zacks Consensus Estimate for Alkermes’ 2022 loss per share has narrowed from 10 cents to 3 cents in the past 60 days. Shares of ALKS have risen 6.0% in the past three months.
Earnings of Alkermes beat estimates in each of the last four quarters, the average being 350.5%.
The Zacks Consensus Estimate for BELLUS Health’s 2022 loss per share has narrowed from 87 cents to 76 cents while that for 2023 has gone down from $1.11 per share to 98 cents per share in the past 60 days. Shares of BLU haverisen 26.4% in the past three months.
BELLUS Health delivered a four-quarter average negative earnings surprise of 2.68%.
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J&J's (JNJ) Stock Outperforms Industry YTD: Here's Why
J&J’s (JNJ - Free Report) shares have outperformed the industry this year. The stock has risen 1.1% this year so far against a decline of 2.7% for the industry. Here we discuss a few reasons that have driven the stock this year so far.
J&J’s Pharma unit is performing at above-market levels, supported by its blockbuster drugs, Darzalex and Stelara, and contribution from newer drugs, Erleada and Tremfya. Meanwhile, other core products like Simponi/Simponi Aria and Invega Sustenna are also contributing to growth. J&J’s Pharmaceutical segment sales rose 6.3% year over year to $12.9 billion in the first quarter of 2022, reflecting 9.3% operational growth.
J&J continues to expect its Pharmaceutical business to deliver market-leading sales growth in 2022, driven by drugs like Darzalex, Tremfya, Stelara, Erleada and the newly launched Rybrevant.
Sales in J&J’s MedTech segment improved in the first quarter, driven by a faster-than-expected market recovery, better commercial execution and new product launches. J&J saw a steady uptick in surgical procedures in the first quarter with the easing of COVID restrictions in several countries. In the MedTech segment, J&J expects continued market recovery and uptake from recently launched products. Second-half sales of the MedTech unit are expected to be stronger than the first half.
Sales in J&J’s Consumer unit are being hurt by external supply constraints. In the Consumer segment, J&J expects the supply constraints and inflationary pressure to continue to linger throughout the remainder of 2022. However, the impact is expected to be more pronounced in the first half of the year. Second-half sales are expected to be stronger than the first half.
J&J is also making rapid progress with its pipeline and line extensions. It gained FDA approval for its BCMA-directed CAR-T cell therapy, Carvykti (ciltacabtagene autoleucel) for previously treated, relapsed or refractory multiple myeloma in February. An FDA decision on teclistamab for relapsed or refractory multiple myeloma and an EU decision on ciltacabtagene autoleucel is expected this year. Several pivotal data readouts are also expected in 2022.
J&J also plans to take a more aggressive stance for M&A activity as it expects its strong cash position to help it pursue tuck-in M&As to grow its business.
Conclusion
J&J faces its share of challenges. Sales of its single-shot COVID-19 vaccine have been below expectations due to global surplus supply and demand uncertainty. The FDA also limited the use of J&J’s vaccine to adults (18 and older) for whom other COVID-19 vaccines are not accessible or clinically appropriate. Other headwinds like generic competition and pricing pressure continue. Though J&J has taken meaningful steps to resolve its talc and opioid litigation in 2022, it continues to remain an overhang on the stock.
Nonetheless, better sales trends in its Pharmaceutical and Medical Devices units, continued pipeline success, and rapid progress toward the resolution of litigation issues should keep the stock afloat through the rest of the year.
Zacks Rank and Stocks to Consider
J&J has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked biotech stocks are Sesen Bio , Alkermes (ALKS - Free Report) and BELLUS Health . While Alkermes and Sesen Bio have a Zacks Rank of 1, BELLUS Health has a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sesen Bio’s2022 loss has declined from 33 cents to 32 cents per share in the past 60 days. Shares of SESN have risen 30.4% in the past three months.
Earnings of Sesen Bio beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 69.9%.
The Zacks Consensus Estimate for Alkermes’ 2022 loss per share has narrowed from 10 cents to 3 cents in the past 60 days. Shares of ALKS have risen 6.0% in the past three months.
Earnings of Alkermes beat estimates in each of the last four quarters, the average being 350.5%.
The Zacks Consensus Estimate for BELLUS Health’s 2022 loss per share has narrowed from 87 cents to 76 cents while that for 2023 has gone down from $1.11 per share to 98 cents per share in the past 60 days. Shares of BLU haverisen 26.4% in the past three months.
BELLUS Health delivered a four-quarter average negative earnings surprise of 2.68%.