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Should J&J Stock Be in Your Portfolio Ahead of Q2 Earnings?
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Key Takeaways
JNJ will report Q2 earnings on July 16, with sales and EPS estimates at $22.79B and $2.66, respectively.
Growth in key drugs like Darzalex and Tremfya will likely offset declines from Stelara and Imbruvica.
MedTech faces challenges in China, but Abiomed, Shockwave and new products may support growth.
Johnson & Johnson (JNJ - Free Report) will begin the earnings season for the drug & biotech sector when it reports its second-quarter 2025 results on July 16. The Zacks Consensus Estimate for second-quarter sales and earnings is pegged at $22.79 billion and $2.66 per share, respectively. The Zacks Consensus Estimate for J&J’s 2025 earnings has risen from $10.60 per share to $10.64 per share, while that for 2026 has risen from $10.98 per share to $11.09 per share over the past 30 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
JNJ Estimate Movement
Image Source: Zacks Investment Research
JNJ’s Earnings Surprise History
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 5.71%, on average. In the last reported quarter, the company delivered an earnings surprise of 7.78%.
Image Source: Zacks Investment Research
What Does Our Model Say for JNJ?
J&J has an Earnings ESP of +2.40% and a Zacks Rank #2 (Buy), indicating a likely positive surprise. Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 or #3 (Hold) have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping JNJ’s Upcoming Results
Sales in J&J’s Innovative Medicines segment are expected to have been driven by higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains.
For Darzalex, the consensus mark is pegged at $3.45 billion, while our model estimates sales of $3.44 billion.
The Zacks Consensus Estimate for Tremfya is $1.08 billion, while our model estimate is $1.09 billion.
The Zacks Consensus Estimate for Erleada sales is $853.0 million, while our model projects sales to be $903.9 million.
Other products like Xarelto and Simponi/Simponi Aria are likely to show growth. The rapid adoption of new drugs like Carvykti, Tecvayli, Talvey, Rybrevant, plus Lazcluze and Spravato is likely to have contributed to top-line growth.
Sales of key drug Stelara are likely to have declined due to the impact of biosimilar competition.
Several biosimilar versions of J&J’s multi-billion-dollar immunology drug, Stelara, have been launched in the United States in 2025. According to patent settlements and license agreements, Amgen (AMGN - Free Report) , Teva, Samsung Bioepis/Sandoz and some other companies have already launched Stelara biosimilars this year. The Stelara LOE hurt revenue growth by 470 basis points in the first quarter of 2025. We expect the negative impact to be steeper in the second quarter.
The Zacks Consensus Estimate, as well as our model estimates for Stelara sales, is pegged at $1.88 billion.
Imbruvica sales are likely to have declined due to rising competitive pressure in the United States due to new oral competition. The Zacks Consensus Estimate for Imbruvica is $697.0 million, while our model indicates sales to be $684.8 million.
Generic/biosimilar competition for drugs like Zytiga and Remicade is likely to have hurt the top line.
The negative impact of the Part D redesign is expected to have weighed on drugs like Uptravi, Erleada and Tremfya in the second quarter, partially offsetting the benefit from share gains and market growth.
The Zacks Consensus Estimate for J&J’s Innovative Medicine unit is $14.55 billion, while our estimate is $14.50 billion.
In April, the FDA approved J&J’s monoclonal antibody, Imaavy (nipocalimab), for its first indication, generalized myasthenia gravis, an autoantibody disease. Investors will be keen to know the commercial plans for the drug on the second-quarter conference call.
The MedTech segment is expected to have faced difficult year-over-year comparisons in the second quarter.
J&J’s MedTech business has been facing continued headwinds in the Asia Pacific, specifically in China, where sales are expected to have been hurt by the impact of the volume-based procurement (VBP) program. VBP is a government-driven cost containment effort in China. J&J does not expect any improvement in its business in the Asia Pacific region, specifically in China, in the second quarter or other quarters of 2025. Competitive pressure is likely to continue to hurt sales growth in some MedTech businesses, like U.S. electrophysiology for PFA ablation catheter.
However, strong performance in the newly acquired cardiovascular businesses, Abiomed and Shockwave, and new product uptake are expected to have boosted growth in other markets in the MedTech segment.
The Zacks Consensus Estimate for J&J’s MedTech segment is $8.25 billion, while our model estimate is $8.31 billion.
On the first-quarter conference call, J&J had said it estimates tariff-related costs of approximately $400 million, mainly from China, which are expected to primarily impact its MedTech business. An update is expected on the second-quarter conference call.
Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold J&J stock ahead of earnings.
JNJ’s Stock Price Performance & Valuation
So far this year, J&J’s stock has risen 10.3% compared with an increase of 1.8% for the industry. The stock has also outperformed the sector as well as the S&P 500, as seen in the chart below.
JNJ Stock Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
From a valuation standpoint, J&J is reasonably valued. Going by the price/earnings ratio, the company’s shares currently trade at 14.42 forward earnings, slightly lower than 15.13 for the industry. The stock is trading slightly below its five-year mean of 15.71.
JNJ Stock Valuation
Image Source: Zacks Investment Research
Investment Thesis for JNJ
J&J’s biggest strength is its diversified business model. With last year’s complete separation of the Consumer Health segment into a newly listed company called Kenvue (KVUE - Free Report) , J&J has become a two-sector company, focusing on the Pharmaceutical and MedTech fields.
J&J’s Innovative Medicine unit is showing a growth trend. In 2025, J&J expects growth in the Innovative Medicine segment in the face of Stelara biosimilar entrants to be driven by its key products such as Darzalex, Tremfya, Spravato and Erleada, as well as new drugs like Carvykti, Tecvayli and Talvey, and new indications for Tremfya and Rybrevant.
J&J is also making rapid progress with its pipeline and has been on an acquisition spree lately, which has strengthened its pipeline.
Continuing the M&A momentum, in April, J&J acquired Intra-Cellular Therapies for approximately $14.6 billion, strengthening its presence in the neurological and psychiatric drug market.
However, the softness in the MedTech unit, the Stelara patent cliff and the potential impact of Part D redesign will be significant headwinds in 2025. It remains to be seen how the company navigates them.
The legal battle surrounding its talc lawsuits is a persistent headwind. The lawsuits allege that its talc products contain asbestos, which caused many women to develop ovarian and some other cancers. In April, a bankruptcy court in Texas rejected J&J’s proposed bankruptcy plan to settle its talc lawsuits after a two-week trial in Houston. J&J will go back to the traditional tort system to fight the lawsuits individually with its bankruptcy strategy to settle the lawsuits failing for the third time.
Consider Investing in J&J’s Stock
J&J has shown steady revenue and EPS growth for years. No matter how the second-quarter results play out, one may consider investing in JNJ, considering its stock price appreciation this year, rising estimates and a decent valuation.
J&J considers 2025 to be a “catalyst year,” positioning the company for growth in the second half of the decade. J&J expects operational sales growth in both the Innovative Medicine and MedTech segments to be higher in the second half than in the first. While newly launched products should drive growth in the Innovative Medicines segment in the second half, the MedTech segment may benefit from new products and easier comps. J&J expects growth to accelerate from 2026 onward.
Image: Bigstock
Should J&J Stock Be in Your Portfolio Ahead of Q2 Earnings?
Key Takeaways
Johnson & Johnson (JNJ - Free Report) will begin the earnings season for the drug & biotech sector when it reports its second-quarter 2025 results on July 16. The Zacks Consensus Estimate for second-quarter sales and earnings is pegged at $22.79 billion and $2.66 per share, respectively. The Zacks Consensus Estimate for J&J’s 2025 earnings has risen from $10.60 per share to $10.64 per share, while that for 2026 has risen from $10.98 per share to $11.09 per share over the past 30 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
JNJ Estimate Movement
JNJ’s Earnings Surprise History
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 5.71%, on average. In the last reported quarter, the company delivered an earnings surprise of 7.78%.
What Does Our Model Say for JNJ?
J&J has an Earnings ESP of +2.40% and a Zacks Rank #2 (Buy), indicating a likely positive surprise. Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 or #3 (Hold) have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping JNJ’s Upcoming Results
Sales in J&J’s Innovative Medicines segment are expected to have been driven by higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains.
For Darzalex, the consensus mark is pegged at $3.45 billion, while our model estimates sales of $3.44 billion.
The Zacks Consensus Estimate for Tremfya is $1.08 billion, while our model estimate is $1.09 billion.
The Zacks Consensus Estimate for Erleada sales is $853.0 million, while our model projects sales to be $903.9 million.
Other products like Xarelto and Simponi/Simponi Aria are likely to show growth. The rapid adoption of new drugs like Carvykti, Tecvayli, Talvey, Rybrevant, plus Lazcluze and Spravato is likely to have contributed to top-line growth.
Sales of key drug Stelara are likely to have declined due to the impact of biosimilar competition.
Several biosimilar versions of J&J’s multi-billion-dollar immunology drug, Stelara, have been launched in the United States in 2025. According to patent settlements and license agreements, Amgen (AMGN - Free Report) , Teva, Samsung Bioepis/Sandoz and some other companies have already launched Stelara biosimilars this year. The Stelara LOE hurt revenue growth by 470 basis points in the first quarter of 2025. We expect the negative impact to be steeper in the second quarter.
The Zacks Consensus Estimate, as well as our model estimates for Stelara sales, is pegged at $1.88 billion.
Imbruvica sales are likely to have declined due to rising competitive pressure in the United States due to new oral competition. The Zacks Consensus Estimate for Imbruvica is $697.0 million, while our model indicates sales to be $684.8 million.
Generic/biosimilar competition for drugs like Zytiga and Remicade is likely to have hurt the top line.
The negative impact of the Part D redesign is expected to have weighed on drugs like Uptravi, Erleada and Tremfya in the second quarter, partially offsetting the benefit from share gains and market growth.
The Zacks Consensus Estimate for J&J’s Innovative Medicine unit is $14.55 billion, while our estimate is $14.50 billion.
In April, the FDA approved J&J’s monoclonal antibody, Imaavy (nipocalimab), for its first indication, generalized myasthenia gravis, an autoantibody disease. Investors will be keen to know the commercial plans for the drug on the second-quarter conference call.
The MedTech segment is expected to have faced difficult year-over-year comparisons in the second quarter.
J&J’s MedTech business has been facing continued headwinds in the Asia Pacific, specifically in China, where sales are expected to have been hurt by the impact of the volume-based procurement (VBP) program. VBP is a government-driven cost containment effort in China. J&J does not expect any improvement in its business in the Asia Pacific region, specifically in China, in the second quarter or other quarters of 2025. Competitive pressure is likely to continue to hurt sales growth in some MedTech businesses, like U.S. electrophysiology for PFA ablation catheter.
However, strong performance in the newly acquired cardiovascular businesses, Abiomed and Shockwave, and new product uptake are expected to have boosted growth in other markets in the MedTech segment.
The Zacks Consensus Estimate for J&J’s MedTech segment is $8.25 billion, while our model estimate is $8.31 billion.
On the first-quarter conference call, J&J had said it estimates tariff-related costs of approximately $400 million, mainly from China, which are expected to primarily impact its MedTech business. An update is expected on the second-quarter conference call.
Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold J&J stock ahead of earnings.
JNJ’s Stock Price Performance & Valuation
So far this year, J&J’s stock has risen 10.3% compared with an increase of 1.8% for the industry. The stock has also outperformed the sector as well as the S&P 500, as seen in the chart below.
JNJ Stock Outperforms Industry, Sector & S&P 500
From a valuation standpoint, J&J is reasonably valued. Going by the price/earnings ratio, the company’s shares currently trade at 14.42 forward earnings, slightly lower than 15.13 for the industry. The stock is trading slightly below its five-year mean of 15.71.
JNJ Stock Valuation
Investment Thesis for JNJ
J&J’s biggest strength is its diversified business model. With last year’s complete separation of the Consumer Health segment into a newly listed company called Kenvue (KVUE - Free Report) , J&J has become a two-sector company, focusing on the Pharmaceutical and MedTech fields.
J&J’s Innovative Medicine unit is showing a growth trend. In 2025, J&J expects growth in the Innovative Medicine segment in the face of Stelara biosimilar entrants to be driven by its key products such as Darzalex, Tremfya, Spravato and Erleada, as well as new drugs like Carvykti, Tecvayli and Talvey, and new indications for Tremfya and Rybrevant.
J&J is also making rapid progress with its pipeline and has been on an acquisition spree lately, which has strengthened its pipeline.
Continuing the M&A momentum, in April, J&J acquired Intra-Cellular Therapies for approximately $14.6 billion, strengthening its presence in the neurological and psychiatric drug market.
However, the softness in the MedTech unit, the Stelara patent cliff and the potential impact of Part D redesign will be significant headwinds in 2025. It remains to be seen how the company navigates them.
The legal battle surrounding its talc lawsuits is a persistent headwind. The lawsuits allege that its talc products contain asbestos, which caused many women to develop ovarian and some other cancers. In April, a bankruptcy court in Texas rejected J&J’s proposed bankruptcy plan to settle its talc lawsuits after a two-week trial in Houston. J&J will go back to the traditional tort system to fight the lawsuits individually with its bankruptcy strategy to settle the lawsuits failing for the third time.
Consider Investing in J&J’s Stock
J&J has shown steady revenue and EPS growth for years. No matter how the second-quarter results play out, one may consider investing in JNJ, considering its stock price appreciation this year, rising estimates and a decent valuation.
J&J considers 2025 to be a “catalyst year,” positioning the company for growth in the second half of the decade. J&J expects operational sales growth in both the Innovative Medicine and MedTech segments to be higher in the second half than in the first. While newly launched products should drive growth in the Innovative Medicines segment in the second half, the MedTech segment may benefit from new products and easier comps. J&J expects growth to accelerate from 2026 onward.
You can see the complete list of today’s Zacks #1 Rank stocks here.