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JNJ Beats Q3 Earnings Estimates, Raises View: ETFs in Focus
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Johnson & Johnson (JNJ - Free Report) set the ball rolling for the pharma and medical device manufacturing space’s third-quarter 2023 earnings on Oct 17, before the opening bell. The world's biggest healthcare products maker continued with its long streak of earnings beat. It topped revenue and earnings estimates as well as lifted the full-year outlook.
Despite the solid results, JNJ shares declined 0.9% on the day. Investors seeking to tap the opportune moment should consider ETFs having the largest allocation to this diversified drug maker. These include iShares U.S. Pharmaceuticals ETF (IHE - Free Report) , Health Care Select Sector SPDR Fund (XLV - Free Report) , iShares U.S. Healthcare ETF (IYH - Free Report) , First Trust Nasdaq Pharmaceuticals ETF (FTXH - Free Report) and Vanguard Health Care ETF (VHT - Free Report) .
Earnings per share came in at $2.66, beating the Zacks Consensus Estimate of $2.52 and improving 19.3% from the year-ago quarter. Revenues grew 6.8% year over year to $21.4 billion and edged past the Zacks Consensus Estimate of $21 billion (see: all the Healthcare ETFs here).
The company spun off its consumer products division into a separate company, Kenvue (KVUE - Free Report) , in August and recorded a $21 billion gain from the spin-off of its consumer health unit.
Following the Kenvue split, Johnson & Johnson divided its business into just two segments: innovative medicines and medtech. Innovative Medicines sales advanced 5.1% to $13.89 billion, while sales from MedTech devices jumped 10% to $7.46 billion.
For 2023, Johnson & Johnson lifted its profit forecast on the growing demand for its newer cancer treatments, such as Carvykti and Tecvayli. Excluding its consumer health unit, the company expects 2023 adjusted profit of $10.07-$10.13 per share, compared with its previous outlook of $10.00-$10.10 per share. It projects revenues in the range of $83.6-$84 billion, up from its previous forecast of $83.2-$84 billion. The Zacks Consensus Estimate is pegged at $84.46 for revenues and $10.03 for earnings per share.
iShares U.S. Pharmaceuticals ETF provides exposure to 34 companies that manufacture prescription or over-the-counter drugs or vaccines by tracking the Dow Jones U.S. Select Pharmaceuticals Index. Of these, Johnson and Johnson takes the second spot, accounting for 23.4% share.
iShares U.S. Pharmaceuticals ETF has $359.4 million in AUM and charges 40 bps in fees and expenses. Volume is lower as it exchanges about 17,000 shares a day. The fund has a Zacks ETF Rank #2 (Buy) with a High risk outlook.
Health Care Select Sector SPDR Fund is the most popular healthcare ETF and follows the Health Care Select Sector Index. It holds 65 securities in its basket, with JNJ taking the top spot at 10.2% of the assets. Pharma and healthcare providers and services take the largest share at 31.8% and 23.3%, respectively (read: UnitedHealth Beats on Q3 Earnings, Raises View: ETFs to Gain).
Health Care Select Sector SPDR Fund manages $38.5 billion in its asset base and trades in a heavy volume of around 9 million shares. The expense ratio comes in at 0.10%. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
iShares U.S. Healthcare ETF offers exposure to 115 U.S. healthcare equipment and services, pharmaceuticals, and biotechnology companies by tracking the Russell 1000 Health Care RIC 22.5/45 Capped Gross Index. Here again, Johnson and Johnson is the third firm, accounting for 7.5% of the total assets. In terms of industrial exposure, pharma takes the top spot at 31.7%, followed by biotech (18.2%) and healthcare equipment (17.5%).
iShares U.S. Healthcare ETF has amassed $3 billion in its asset base, while charging 40 bps in annual fees. It trades in a moderate volume of around 42,000 shares a day and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
First Trust Nasdaq Pharmaceuticals ETF offers exposure to U.S. companies within the pharmaceuticals industry and tracks the Nasdaq US Smart Pharmaceuticals Index. It holds 50 securities in its basket, with JNJ occupying the second spot at 7.3% of the assets. FTXH has a lower AUM of $20.5 million and an average daily volume of 8,000 shares.
First Trust Nasdaq Pharmaceuticals ETF charges 60 bps in annual fees and has a Zacks ETF Rank #3.
Vanguard Health Care ETF tracks the MSCI US Investable Market Health Care 25/50 Index and holds 412 stocks in its basket. Of these, JNJ takes the third spot with a 6.8% allocation. Pharma takes the largest share at 28.1%, while biotech and healthcare equipment round off the top three spots.
Vanguard Health Care ETF is also one of the most popular and liquid ETFs, with AUM of $16.5 billion and an average daily volume of about 181,000 shares. It charges 10 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
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JNJ Beats Q3 Earnings Estimates, Raises View: ETFs in Focus
Johnson & Johnson (JNJ - Free Report) set the ball rolling for the pharma and medical device manufacturing space’s third-quarter 2023 earnings on Oct 17, before the opening bell. The world's biggest healthcare products maker continued with its long streak of earnings beat. It topped revenue and earnings estimates as well as lifted the full-year outlook.
Despite the solid results, JNJ shares declined 0.9% on the day. Investors seeking to tap the opportune moment should consider ETFs having the largest allocation to this diversified drug maker. These include iShares U.S. Pharmaceuticals ETF (IHE - Free Report) , Health Care Select Sector SPDR Fund (XLV - Free Report) , iShares U.S. Healthcare ETF (IYH - Free Report) , First Trust Nasdaq Pharmaceuticals ETF (FTXH - Free Report) and Vanguard Health Care ETF (VHT - Free Report) .
Earnings per share came in at $2.66, beating the Zacks Consensus Estimate of $2.52 and improving 19.3% from the year-ago quarter. Revenues grew 6.8% year over year to $21.4 billion and edged past the Zacks Consensus Estimate of $21 billion (see: all the Healthcare ETFs here).
The company spun off its consumer products division into a separate company, Kenvue (KVUE - Free Report) , in August and recorded a $21 billion gain from the spin-off of its consumer health unit.
Following the Kenvue split, Johnson & Johnson divided its business into just two segments: innovative medicines and medtech. Innovative Medicines sales advanced 5.1% to $13.89 billion, while sales from MedTech devices jumped 10% to $7.46 billion.
For 2023, Johnson & Johnson lifted its profit forecast on the growing demand for its newer cancer treatments, such as Carvykti and Tecvayli. Excluding its consumer health unit, the company expects 2023 adjusted profit of $10.07-$10.13 per share, compared with its previous outlook of $10.00-$10.10 per share. It projects revenues in the range of $83.6-$84 billion, up from its previous forecast of $83.2-$84 billion. The Zacks Consensus Estimate is pegged at $84.46 for revenues and $10.03 for earnings per share.
iShares U.S. Pharmaceuticals ETF (IHE - Free Report)
iShares U.S. Pharmaceuticals ETF provides exposure to 34 companies that manufacture prescription or over-the-counter drugs or vaccines by tracking the Dow Jones U.S. Select Pharmaceuticals Index. Of these, Johnson and Johnson takes the second spot, accounting for 23.4% share.
iShares U.S. Pharmaceuticals ETF has $359.4 million in AUM and charges 40 bps in fees and expenses. Volume is lower as it exchanges about 17,000 shares a day. The fund has a Zacks ETF Rank #2 (Buy) with a High risk outlook.
Health Care Select Sector SPDR Fund (XLV - Free Report)
Health Care Select Sector SPDR Fund is the most popular healthcare ETF and follows the Health Care Select Sector Index. It holds 65 securities in its basket, with JNJ taking the top spot at 10.2% of the assets. Pharma and healthcare providers and services take the largest share at 31.8% and 23.3%, respectively (read: UnitedHealth Beats on Q3 Earnings, Raises View: ETFs to Gain).
Health Care Select Sector SPDR Fund manages $38.5 billion in its asset base and trades in a heavy volume of around 9 million shares. The expense ratio comes in at 0.10%. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
iShares U.S. Healthcare ETF (IYH - Free Report)
iShares U.S. Healthcare ETF offers exposure to 115 U.S. healthcare equipment and services, pharmaceuticals, and biotechnology companies by tracking the Russell 1000 Health Care RIC 22.5/45 Capped Gross Index. Here again, Johnson and Johnson is the third firm, accounting for 7.5% of the total assets. In terms of industrial exposure, pharma takes the top spot at 31.7%, followed by biotech (18.2%) and healthcare equipment (17.5%).
iShares U.S. Healthcare ETF has amassed $3 billion in its asset base, while charging 40 bps in annual fees. It trades in a moderate volume of around 42,000 shares a day and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
First Trust Nasdaq Pharmaceuticals ETF (FTXH - Free Report)
First Trust Nasdaq Pharmaceuticals ETF offers exposure to U.S. companies within the pharmaceuticals industry and tracks the Nasdaq US Smart Pharmaceuticals Index. It holds 50 securities in its basket, with JNJ occupying the second spot at 7.3% of the assets. FTXH has a lower AUM of $20.5 million and an average daily volume of 8,000 shares.
First Trust Nasdaq Pharmaceuticals ETF charges 60 bps in annual fees and has a Zacks ETF Rank #3.
Vanguard Health Care ETF (VHT - Free Report)
Vanguard Health Care ETF tracks the MSCI US Investable Market Health Care 25/50 Index and holds 412 stocks in its basket. Of these, JNJ takes the third spot with a 6.8% allocation. Pharma takes the largest share at 28.1%, while biotech and healthcare equipment round off the top three spots.
Vanguard Health Care ETF is also one of the most popular and liquid ETFs, with AUM of $16.5 billion and an average daily volume of about 181,000 shares. It charges 10 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.