We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ETFs to Buy Post JNJ's Q4 Earnings Surprise & Bullish Cash Flow View
Read MoreHide Full Article
Key Takeaways
JNJ topped Q4 EPS and sales estimates, driven by strong growth in Innovative Medicines and MedTech segments.
Johnson & Johnson expects higher 2026 cash flow on R&D, M&A investments, and multiple new drug launches.
IHE offers diversified exposure to JNJ after its earnings surprise and brief post-report dip.
Medtech giant Johnson & Johnson (JNJ - Free Report) announced better-than-expected fourth-quarter 2025 results on Jan. 21, 2026. The company continued its streak of earnings beats and also beat on sales estimates.
However, despite reporting an impressive quarterly performance, this drugmaker sustained a 3% fall at the bourses in the pre-market trading session on Wednesday. This dip, largely attributed to a sharp decline in Stelara’s sales and J&J’s talc-litigation-related legal headwinds, was short-lived, as the stock began to claw back gains the following day, inching up 0.2%.
For investors looking to capitalize on JNJ’s 'catapult year' and its dominant position in Pharma and MedTech, healthcare exchange-traded funds (ETFs) offer a lower-risk entry point to gain exposure to the world’s second-largest healthcare provider before the next major rally (see: all the Healthcare ETFs here), particularly for those seeking to avoid single-stock idiosyncratic risk.
But before suggesting a few such healthcare ETFs that deserve a place in your portfolio, let us take a look at JNJ’s overall fourth-quarter performance.
A Brief Look at JNJ’s Q4 Results
JNJ’s fourth-quarter earnings per share (EPS) of $2.46 beat the Zacks Consensus Estimate by 1.2% and also improved 20.6% from the year-ago quarter’s earnings. Sales grew 9.1% year over year to $24.56 billion and also outpaced the Zacks Consensus Estimate by 1.8%.
Segment-wise, sales from Innovative Medicines jumped 10% year over year, while sales from MedTech rose 7.1%.
Sales of JNJ’s blockbuster multiple myeloma medicine Darzalex soared 26.6% year over year to $3.90 billion. Sales of its other oncology drug, Erleada, grew 22.4% year over year, while those of new drugs, Carvykti and Talvey, soared 65.8% and 75.8%, respectively, during the same period. However, sales of Imbruvica and Zytiga declined 6.5% and 11.9%, respectively, owing to competitive pressure.
In MedTech, single-digit sales growth from electrophysiology products, along with double-digit sales growth from its Cardiovascular businesses — Abiomed and Shockwave — contributed to the segment’s top-line performance.
Looking ahead, J&J’s management expects that its solid investments last year in R&D and M&A — along with the acquisitions of Intra-Cellular Therapies and Halda Therapeutics and the buildout of new, state-of-the-art U.S. manufacturing facilities — will accelerate the delivery of its next wave of innovation this year.
Segment wise, the company projects to witness solid sales growth across its Innovative Medicine business driven by TREMFYA, DARZALEX, CARVYKTI, ERLEADA and SPRAVATO, as well as new launches of RYBREVANT plus LAZCLUZE in lung cancer, and CAPLYTA as adjunctive therapy for major depressive disorder. In MedTech, steady market expansion of new product launches across its Cardiovascular, Surgery and Vision portfolios, including VARIPULSE in Electrophysiology, ETHICON4000 in Surgery, and the OASYS MAX family in Vision, should boost growth.
In terms of financial strength, the company expects increasing its free cash flow generation to approximately $21 billion in 2026 from $19.7 billion last year.
Market Reaction Post Q4 Earnings
Following J&J’s upbeat Q4 results, Morgan Stanley raised its price target for the pharma giant to $200 from $197 but maintained its equal-weight rating, citing a potential psoriasis drug launch and late-stage data releases for milvexian in atrial fibrillation and stroke prevention expected in the second half of 2026 as key drivers of the stock’s performance (as cited in Finmize).
This fund, with net assets worth $984.6 million, provides exposure to 55 companies that manufacture prescription or over-the-counter drugs or vaccines. Of these, Johnson and Johnson takes the second spot, accounting for a 22.56% share.
IHE has rallied 32.2% over the past year and charges 36 basis points (bps) in fees. Its volume is good at an average of 134,369 shares a day. IHE holds a Zacks Rank #2 (Buy).
State Street Health Care Select Sector SPDR ETF (XLV - Free Report)
This fund, with assets under management (AUM) of $42.17 billion, provides exposure to 60 companies across pharmaceuticals, biotechnology, health care equipment and supplies, health care providers and services, life sciences tools and services, and health care technology industries. Of these, Johnson and Johnson takes the second spot, accounting for a 9.16% share.
XLV has risen 11.8% over the past year and charges 8 bps in fees. It traded in a heavy volume of around 10.88 million shares in the last trading session. XLV sports a Zacks Rank #1 (Strong Buy).
This fund, with net assets worth $17.3 billion, provides exposure to 416 companies that manufacture health care equipment and supplies or that provide health care-related services, and companies that are primarily involved in the research, development, production, and marketing of pharmaceuticals and biotechnology products. Of these, Johnson and Johnson takes the third spot, accounting for a 4.49% share.
VHT has risen 12.8% over the past year and charges 9 bps in fees. Its volume is good at an average of 285,221 shares a day. VHT sports a Zacks Rank #1.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
ETFs to Buy Post JNJ's Q4 Earnings Surprise & Bullish Cash Flow View
Key Takeaways
Medtech giant Johnson & Johnson (JNJ - Free Report) announced better-than-expected fourth-quarter 2025 results on Jan. 21, 2026. The company continued its streak of earnings beats and also beat on sales estimates.
However, despite reporting an impressive quarterly performance, this drugmaker sustained a 3% fall at the bourses in the pre-market trading session on Wednesday. This dip, largely attributed to a sharp decline in Stelara’s sales and J&J’s talc-litigation-related legal headwinds, was short-lived, as the stock began to claw back gains the following day, inching up 0.2%.
For investors looking to capitalize on JNJ’s 'catapult year' and its dominant position in Pharma and MedTech, healthcare exchange-traded funds (ETFs) offer a lower-risk entry point to gain exposure to the world’s second-largest healthcare provider before the next major rally (see: all the Healthcare ETFs here), particularly for those seeking to avoid single-stock idiosyncratic risk.
But before suggesting a few such healthcare ETFs that deserve a place in your portfolio, let us take a look at JNJ’s overall fourth-quarter performance.
A Brief Look at JNJ’s Q4 Results
JNJ’s fourth-quarter earnings per share (EPS) of $2.46 beat the Zacks Consensus Estimate by 1.2% and also improved 20.6% from the year-ago quarter’s earnings. Sales grew 9.1% year over year to $24.56 billion and also outpaced the Zacks Consensus Estimate by 1.8%.
Segment-wise, sales from Innovative Medicines jumped 10% year over year, while sales from MedTech rose 7.1%.
Sales of JNJ’s blockbuster multiple myeloma medicine Darzalex soared 26.6% year over year to $3.90 billion. Sales of its other oncology drug, Erleada, grew 22.4% year over year, while those of new drugs, Carvykti and Talvey, soared 65.8% and 75.8%, respectively, during the same period. However, sales of Imbruvica and Zytiga declined 6.5% and 11.9%, respectively, owing to competitive pressure.
In MedTech, single-digit sales growth from electrophysiology products, along with double-digit sales growth from its Cardiovascular businesses — Abiomed and Shockwave — contributed to the segment’s top-line performance.
Looking ahead, J&J’s management expects that its solid investments last year in R&D and M&A — along with the acquisitions of Intra-Cellular Therapies and Halda Therapeutics and the buildout of new, state-of-the-art U.S. manufacturing facilities — will accelerate the delivery of its next wave of innovation this year.
Segment wise, the company projects to witness solid sales growth across its Innovative Medicine business driven by TREMFYA, DARZALEX, CARVYKTI, ERLEADA and SPRAVATO, as well as new launches of RYBREVANT plus LAZCLUZE in lung cancer, and CAPLYTA as adjunctive therapy for major depressive disorder. In MedTech, steady market expansion of new product launches across its Cardiovascular, Surgery and Vision portfolios, including VARIPULSE in Electrophysiology, ETHICON4000 in Surgery, and the OASYS MAX family in Vision, should boost growth.
In terms of financial strength, the company expects increasing its free cash flow generation to approximately $21 billion in 2026 from $19.7 billion last year.
Market Reaction Post Q4 Earnings
Following J&J’s upbeat Q4 results, Morgan Stanley raised its price target for the pharma giant to $200 from $197 but maintained its equal-weight rating, citing a potential psoriasis drug launch and late-stage data releases for milvexian in atrial fibrillation and stroke prevention expected in the second half of 2026 as key drivers of the stock’s performance (as cited in Finmize).
JNJ-Heavy ETFs to Buy
iShares U.S. Pharmaceuticals ETF (IHE - Free Report)
This fund, with net assets worth $984.6 million, provides exposure to 55 companies that manufacture prescription or over-the-counter drugs or vaccines. Of these, Johnson and Johnson takes the second spot, accounting for a 22.56% share.
IHE has rallied 32.2% over the past year and charges 36 basis points (bps) in fees. Its volume is good at an average of 134,369 shares a day. IHE holds a Zacks Rank #2 (Buy).
State Street Health Care Select Sector SPDR ETF (XLV - Free Report)
This fund, with assets under management (AUM) of $42.17 billion, provides exposure to 60 companies across pharmaceuticals, biotechnology, health care equipment and supplies, health care providers and services, life sciences tools and services, and health care technology industries. Of these, Johnson and Johnson takes the second spot, accounting for a 9.16% share.
XLV has risen 11.8% over the past year and charges 8 bps in fees. It traded in a heavy volume of around 10.88 million shares in the last trading session. XLV sports a Zacks Rank #1 (Strong Buy).
Vanguard Health Care ETF (VHT - Free Report)
This fund, with net assets worth $17.3 billion, provides exposure to 416 companies that manufacture health care equipment and supplies or that provide health care-related services, and companies that are primarily involved in the research, development, production, and marketing of pharmaceuticals and biotechnology products. Of these, Johnson and Johnson takes the third spot, accounting for a 4.49% share.
VHT has risen 12.8% over the past year and charges 9 bps in fees. Its volume is good at an average of 285,221 shares a day. VHT sports a Zacks Rank #1.