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J&J Stock Trading Above 200 & 50 Day SMA for 2 Months: Time to Buy?
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Key Takeaways
Johnson & Johnson stock has traded above its 50- and 200-day SMAs since mid-June.
J&J posted strong Q2 results, raised guidance and achieved a bullish golden cross in July.
Diversified operations and new drugs support growth despite Stelara losses and China headwinds.
Johnson & Johnson’s (JNJ - Free Report) stock has been trading above its 50-day and 200-day simple moving averages (SMAs) since mid-June. It achieved the golden cross in mid-July, after the company announced strong second-quarter 2025 results and raised sales and EPS guidance for the year.
The 50-day moving average is a short-term indicator, while the 200-day moving average is a longer-term indicator. When the 50-day moving average crosses above the 200-day moving average on a stock’s price chart, it's known as a "golden cross," a bullish signal suggesting potential for a prolonged upward trend. The crossover indicates that the stock's recent price performance has been stronger than its longer-term performance.
The 50-day SMA has been above the 200-day SMA since it achieved the golden cross, a positive sign for the stock’s future gains.
Image Source: Zacks Investment Research
Let’s understand J&J’s strengths and weaknesses to better analyze how to play the stock after it reaches this important support level.
J&J’s Diversified Business Model
Johnson & Johnson’s biggest strength lies in its diversified business model, as it is the only major health care company operating in both the medical devices and pharmaceutical sectors. In 2023,J&J separated its Consumer Health business into a newly listed company called Kenvue (KVUE - Free Report) . The separation of Kenvue allowed J&J to focus on its core pharmaceutical and medical device business.
It has more than 275 subsidiaries, indicating that the business is extremely well-diversified. This diversification helps withstand economic cycles more effectively. J&J has 26 platforms with annual sales exceeding $1 billion. Its diversified business is allowing it to post top-line growth in 2025, despite the loss of exclusivity (LOE) for a blockbuster drug like Stelara. Meanwhile, it has one of the largest R&D budgets among pharma companies.
JNJ’s Innovative Medicine Unit: A Bright Spot
J&J’s Innovative Medicine unit is showing a growth trend. The segment’s sales rose 2.4% in the first half of 2025 on an organic basis despite LOE for Stelara and the negative impact of the Part D redesign. J&J expects continued growth in the second half of 2025 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 expects to generate more than $57 billion in sales in the Innovative Medicines segment in 2025. It expects the Innovative Medicine business to grow 5% to 7% from 2025 to 2030. J&J expects its oncology sales to be more than $50 billion by 2030.
Moreover, J&J believes 10 of its new Innovative Medicine products have the potential to deliver peak sales of $5 billion, including new cancer drugs like Talvey and Tecvayli, a newly acquired drug, Caplyta and pipeline candidates like nipocalimab, TAR-200 and icotrokinra (JNJ-2113). Nipocalimab was approved under the name Imaavy in April for treating generalized myasthenia gravis. TAR-200 is under priority review with the FDA for treating non-muscle invasive bladder cancer and is expected to be approved this year. Caplyta was added with the April acquisition of Intra-Cellular Therapies.
J&J’s MedTech Segment Shows Improvement in Q2
J&J’s MedTech segment sales rose 6.1% on an operational basis in the second quarter, improving from the first-quarter levels, driven by the newly acquired cardiovascular businesses, Abiomed and Shockwave, as well as in Surgical Vision and wound closure in Surgery. Moreover, improvements in J&J’s electrophysiology business also drove sequential growth. In the MedTech segment, increased adoption of newly launched products in Cardiovascular, Surgery and Vision is likely to drive growth in the second half. Sales are expected to be higher in the second half than the first half as the business moves past tougher first-half comps and new products gain momentum throughout 2025.
However, the company continues to face headwinds in China. Sales in China are being hurt by the impact of the volume-based procurement (VBP) program. VBP is a government-driven cost containment effort in China. J&J expects continued impacts from VBP issues in China in 2025 as the program continues to expand across provinces and products.
Patent Expiration of J&J’s Drug Stelara & Other Headwinds
J&J lost U.S. patent exclusivity of Stelara in 2025. The drug generated sales of $10.36 billion in 2024.
Several biosimilar versions of Stelara have been launched in the United States in 2025. According to patent settlements and license agreements, Amgen (AMGN - Free Report) , Teva Pharmaceutical Industries (TEVA - Free Report) , Samsung Bioepis/Sandoz and some other companies have already launched Stelara biosimilars this year. The launch of generics by Amgen, Teva and other companies is significantly eroding Stelara’s sales and hurting J&J’s sales and profits in 2025. Stelara sales declined 38.6% in the first half of 2025. Stelara biosimilar competition is expected to accelerate throughout 2025 as the number of biosimilar entrants increases.
In addition, sales in 2025 are being hurt by the impact of the Medicare Part D redesign under the Inflation Reduction Act (IRA). Among other measures, the IRA requires the U.S. Department of Health and Human Services (HHS) to effectively set prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D.
The HHS has selected J&J’s drugs, Xarelto, Stelara and Imbruvica as one of the first 10 medicines subject to government-set prices.
J&J’s Talc Suits & Pharma Tariffs Remain an Overhang
J&J faces more than 62,000 lawsuits for its talc-based products, primarily baby powders. The lawsuits allege that its talc products contain asbestos, which caused many women to develop ovarian cancer. J&J insists that its talc-based products are safe and do not cause cancer. The company permanently discontinued the sales of its talc-based Johnson’s Baby Powder.
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 has gone back to the traditional tort system to fight the lawsuits individually with its bankruptcy strategy to settle the lawsuits, failing for the third time.
The uncertainty around tariffs and trade production measures has muted economic growth. President Trump has once again threatened to impose heavy tariffs, as high as 250%, on pharmaceutical imports. Trump’s repeated threats to impose tariffs on pharmaceutical imports are aimed at pushing American pharma companies to shift pharmaceutical production back to the United States, primarily from European and Asian countries. Trump has said that drugmakers have about one to one and a half years to bring production back to the United States before the new tariffs are imposed.
J&J has already committed to boosting manufacturing in the United States and has a plan to invest $55 billion over the next four years to ensure that all medicines consumed in the United States are manufactured domestically.
J&J Stock Price, Valuation and Estimates
J&J’s shares have outperformed the industry year to date. The stock has risen 26.0% in the year-to-date period compared witha 1.6% increase for the industry. The stock has also outperformed the sector and the S&P 500 Index, 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 expensive. In terms of the price/earnings ratio, the company’s shares currently trade at 16.03 forward earnings, higher than 14.86 for the industry. The stock is also trading above its five-year mean of 15.65.
JNJ Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings has risen from $10.60 per share to $10.86 over the past 60 days, while that for 2026 has risen from $10.98 to $11.36.
JNJ Estimate Movement
Image Source: Zacks Investment Research
Consider Investing in J&J’s Stock
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.
J&J is also rapidly advancing its pipeline, attaining significant clinical and regulatory milestones that will help drive accelerating growth through the back half of the decade. J&J has also been on an acquisition spree, with the latest acquisition of Intra-Cellular Therapies strengthening its presence in the neurological and psychiatric drug market.
In April, J&J's board authorized a 4.8% hike in its quarterly dividend, marking the company’s 63rd consecutive year of dividend increase.
The Stelara patent cliff and the impact of Part D redesign will be significant headwinds in 2025. The uncertainty around the unresolved legal issues and pharma tariffs lingers. However, the company looks quite confident that it will be able to navigate these challenges.
Image: Bigstock
J&J Stock Trading Above 200 & 50 Day SMA for 2 Months: Time to Buy?
Key Takeaways
Johnson & Johnson’s (JNJ - Free Report) stock has been trading above its 50-day and 200-day simple moving averages (SMAs) since mid-June. It achieved the golden cross in mid-July, after the company announced strong second-quarter 2025 results and raised sales and EPS guidance for the year.
The 50-day moving average is a short-term indicator, while the 200-day moving average is a longer-term indicator. When the 50-day moving average crosses above the 200-day moving average on a stock’s price chart, it's known as a "golden cross," a bullish signal suggesting potential for a prolonged upward trend. The crossover indicates that the stock's recent price performance has been stronger than its longer-term performance.
The 50-day SMA has been above the 200-day SMA since it achieved the golden cross, a positive sign for the stock’s future gains.
Let’s understand J&J’s strengths and weaknesses to better analyze how to play the stock after it reaches this important support level.
J&J’s Diversified Business Model
Johnson & Johnson’s biggest strength lies in its diversified business model, as it is the only major health care company operating in both the medical devices and pharmaceutical sectors. In 2023,J&J separated its Consumer Health business into a newly listed company called Kenvue (KVUE - Free Report) . The separation of Kenvue allowed J&J to focus on its core pharmaceutical and medical device business.
It has more than 275 subsidiaries, indicating that the business is extremely well-diversified. This diversification helps withstand economic cycles more effectively. J&J has 26 platforms with annual sales exceeding $1 billion. Its diversified business is allowing it to post top-line growth in 2025, despite the loss of exclusivity (LOE) for a blockbuster drug like Stelara. Meanwhile, it has one of the largest R&D budgets among pharma companies.
JNJ’s Innovative Medicine Unit: A Bright Spot
J&J’s Innovative Medicine unit is showing a growth trend. The segment’s sales rose 2.4% in the first half of 2025 on an organic basis despite LOE for Stelara and the negative impact of the Part D redesign. J&J expects continued growth in the second half of 2025 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 expects to generate more than $57 billion in sales in the Innovative Medicines segment in 2025. It expects the Innovative Medicine business to grow 5% to 7% from 2025 to 2030. J&J expects its oncology sales to be more than $50 billion by 2030.
Moreover, J&J believes 10 of its new Innovative Medicine products have the potential to deliver peak sales of $5 billion, including new cancer drugs like Talvey and Tecvayli, a newly acquired drug, Caplyta and pipeline candidates like nipocalimab, TAR-200 and icotrokinra (JNJ-2113).
Nipocalimab was approved under the name Imaavy in April for treating generalized myasthenia gravis. TAR-200 is under priority review with the FDA for treating non-muscle invasive bladder cancer and is expected to be approved this year. Caplyta was added with the April acquisition of Intra-Cellular Therapies.
J&J’s MedTech Segment Shows Improvement in Q2
J&J’s MedTech segment sales rose 6.1% on an operational basis in the second quarter, improving from the first-quarter levels, driven by the newly acquired cardiovascular businesses, Abiomed and Shockwave, as well as in Surgical Vision and wound closure in Surgery. Moreover, improvements in J&J’s electrophysiology business also drove sequential growth. In the MedTech segment, increased adoption of newly launched products in Cardiovascular, Surgery and Vision is likely to drive growth in the second half. Sales are expected to be higher in the second half than the first half as the business moves past tougher first-half comps and new products gain momentum throughout 2025.
However, the company continues to face headwinds in China. Sales in China are being hurt by the impact of the volume-based procurement (VBP) program. VBP is a government-driven cost containment effort in China. J&J expects continued impacts from VBP issues in China in 2025 as the program continues to expand across provinces and products.
Patent Expiration of J&J’s Drug Stelara & Other Headwinds
J&J lost U.S. patent exclusivity of Stelara in 2025. The drug generated sales of $10.36 billion in 2024.
Several biosimilar versions of Stelara have been launched in the United States in 2025. According to patent settlements and license agreements, Amgen (AMGN - Free Report) , Teva Pharmaceutical Industries (TEVA - Free Report) , Samsung Bioepis/Sandoz and some other companies have already launched Stelara biosimilars this year. The launch of generics by Amgen, Teva and other companies is significantly eroding Stelara’s sales and hurting J&J’s sales and profits in 2025. Stelara sales declined 38.6% in the first half of 2025. Stelara biosimilar competition is expected to accelerate throughout 2025 as the number of biosimilar entrants increases.
In addition, sales in 2025 are being hurt by the impact of the Medicare Part D redesign under the Inflation Reduction Act (IRA). Among other measures, the IRA requires the U.S. Department of Health and Human Services (HHS) to effectively set prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D.
The HHS has selected J&J’s drugs, Xarelto, Stelara and Imbruvica as one of the first 10 medicines subject to government-set prices.
J&J’s Talc Suits & Pharma Tariffs Remain an Overhang
J&J faces more than 62,000 lawsuits for its talc-based products, primarily baby powders. The lawsuits allege that its talc products contain asbestos, which caused many women to develop ovarian cancer. J&J insists that its talc-based products are safe and do not cause cancer. The company permanently discontinued the sales of its talc-based Johnson’s Baby Powder.
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 has gone back to the traditional tort system to fight the lawsuits individually with its bankruptcy strategy to settle the lawsuits, failing for the third time.
The uncertainty around tariffs and trade production measures has muted economic growth. President Trump has once again threatened to impose heavy tariffs, as high as 250%, on pharmaceutical imports. Trump’s repeated threats to impose tariffs on pharmaceutical imports are aimed at pushing American pharma companies to shift pharmaceutical production back to the United States, primarily from European and Asian countries. Trump has said that drugmakers have about one to one and a half years to bring production back to the United States before the new tariffs are imposed.
J&J has already committed to boosting manufacturing in the United States and has a plan to invest $55 billion over the next four years to ensure that all medicines consumed in the United States are manufactured domestically.
J&J Stock Price, Valuation and Estimates
J&J’s shares have outperformed the industry year to date. The stock has risen 26.0% in the year-to-date period compared witha 1.6% increase for the industry. The stock has also outperformed the sector and the S&P 500 Index, as seen in the chart below.
JNJ Stock Outperforms Industry, Sector & S&P 500
From a valuation standpoint, J&J is expensive. In terms of the price/earnings ratio, the company’s shares currently trade at 16.03 forward earnings, higher than 14.86 for the industry. The stock is also trading above its five-year mean of 15.65.
JNJ Stock Valuation
The Zacks Consensus Estimate for 2025 earnings has risen from $10.60 per share to $10.86 over the past 60 days, while that for 2026 has risen from $10.98 to $11.36.
JNJ Estimate Movement
Consider Investing in J&J’s Stock
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.
J&J is also rapidly advancing its pipeline, attaining significant clinical and regulatory milestones that will help drive accelerating growth through the back half of the decade. J&J has also been on an acquisition spree, with the latest acquisition of Intra-Cellular Therapies strengthening its presence in the neurological and psychiatric drug market.
In April, J&J's board authorized a 4.8% hike in its quarterly dividend, marking the company’s 63rd consecutive year of dividend increase.
The Stelara patent cliff and the impact of Part D redesign will be significant headwinds in 2025. The uncertainty around the unresolved legal issues and pharma tariffs lingers. However, the company looks quite confident that it will be able to navigate these challenges.
The stock’s price appreciation this year and rising estimates should encourage investors to invest in this Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.