It has been about a month since the last earnings report for Johnson & Johnson (JNJ Quick QuoteJNJ - Free Report) . Shares have lost about 3.5% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Johnson & Johnson due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Q1 Earnings & Sales Beat Estimates

J&J’s first-quarter 2026 earnings came in at $2.70 per share, which beat the Zacks Consensus Estimate of $2.67. Earnings declined 2.5% from the year-ago period. 

Adjusted earnings exclude intangible amortization expense and special items. Including these items, reported earnings were $2.14 per share, down 52.9% year over year.

Sales came in at $24.1 billion, which also beat the Zacks Consensus Estimate of $23.44 billion.

Sales rose 9.9% from the year-ago quarter, reflecting an operational increase of 6.4% and a positive currency impact of 3.5%. Organically, excluding the impact of acquisitions/divestitures and currency, sales rose 5.3% on an operational basis. Stelara’s LOE negatively impacted total revenue growth by 540 basis points. Excluding Stelara, sales grew in a double-digit range in the quarter.

First-quarter sales in the domestic market rose 8.3% to $13.33 billion. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, domestic sales rose 6.2% in the quarter.

International sales rose 11.9% on a reported basis to $10.7 billion, reflecting an operational increase of 3.9% and a positive currency impact of 8.0%. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, international sales rose 4.0% in the quarter.

Segment Details

Innovative Medicines Segment 

J&J’s Innovative Medicines segment sales rose 11.2% year over year to $15.43 billion, reflecting a 7.4% operational increase and a positive currency impact of 3.8%. Excluding the impact of all acquisitions and divestitures and currency on an adjusted operational basis, worldwide sales rose 5.6%. Innovative Medicines sales beat the Zacks Consensus Estimate of $15.05 billion.

Higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains drove the segment’s growth. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato contributed significantly to growth. The sales growth was partially dampened by steeper-than-expected decline in sales of Stelara due to biosimilar erosion and lower sales of Imbruvica.

Stelara’s LOE negatively impacted the Innovative Medicine segment’s growth by 920 basis points in the quarter.

In the Innovative Medicines segment, sales in the United States rose 9.6%, while outside U.S. sales rose 4.3% on an operational basis.

Oncology 

Darzalex rose 22.5% year over year to $3.96 billion in the quarter, driven by continued share gains across all lines of therapy, particularly the front-line setting, as well as market growth. Sales beat the Zacks Consensus Estimate of $3.85 billion. 

Imbruvica sales declined 6.9% to $660.0 million. Rising competitive pressure in the United States due to new oral competition has been hurting Imbruvica's sales for the past few quarters. Imbruvica sales were, however, better than the Zacks Consensus Estimate of $637.0 million.

Erleada generated sales of $949.0 million in the quarter, up 23.1% year over year, driven by share gains and market growth. Erleada sales beat the Zacks Consensus Estimate of $919.0 million.

New drug Carvykti recorded sales of $597.0 million, up 62.1% year over year, driven by share gains and continued capacity expansion. Another new drug, Tecvayli, recorded sales of $202.0 million in the quarter, up 33.5% year over year, driven by launch uptake, share gains from continued expansion into the community setting and the launch of Tecvayli plus Darzalex Faspro for relapsed/refractory multiple myeloma.

Sales of Talvey were $152.0 million, up 76.7% year over year, driven by continued expansion into the community setting. 

Rybrevant/Lazcluze sales were $257.0 million compared with $216.0 million in the previous quarter, driven by continued launch uptake in all regions, share gains and rapid uptake of Rybrevant Faspro.

J&J’s newly launched therapy, Inlexzo, for certain types of bladder cancer, generated sales of slightly above $30 million in the quarter. On the call, the company said that it received a permanent J-code for Inlexzo reimbursement in April that should boost patient access and sales for the therapy.

Immunology

Stelara sales declined 59.7% to $656.0 million in the quarter due to the impact of biosimilar competition. While U.S. sales of Stelara declined 77.6%, international sales declined 32.4% in the quarter. Stelara sales significantly missed the Zacks Consensus Estimate of $944.0 million.

Tremfya recorded sales of $1.61 billion in the quarter, up 68.3% year over year, driven by share gains across all indications, particularly the IBD indications as well as market growth. Tremfya sales beat the Zacks Consensus Estimate of $1.48 billion.

On the conference call, J&J said that it is seeing strong demand for its newly launched oral pill for plaque psoriasis, Icotyde.

Simponi/Simponi Aria sales declined 1.7% to $647.0 million. Sales of Remicade declined 9.5% in the quarter to $422.0 million.

Neuroscience, PH and Other Drugs

In neuroscience, Spravato recorded sales of $468.0 million, up 46.4% year over year, driven by strong demand trends. Caplyta recorded sales of $270 million in the quarter compared with $249.0 million in the previous quarter backed by new patient starts and continuing patient growth following its FDA approval in adjunctive major depressive disorder. Invega Sustenna/Xeplion/Invega Trinza/Trevicta sales rose 15% to $1.04 billion in the quarter. 

Pulmonary hypertension (PH) drug Uptravi recorded sales of $483.0 million, up 7.1% year over year. Another PAH drug, Opsumit, recorded sales of $606.0 million, up 16.1% year over year. 

Xarelto sales declined 7% in the quarter to $642.0 million. Prezista sales rose 10% to $443.0 million.  

MedTech Segment

MedTech segment sales came in at $8.64 billion, up 7.7% from the year-ago period, including an operational increase of 4.6% and a positive currency impact of 3.1%. MedTech segment sales beat the Zacks Consensus Estimate of $8.57 billion.

Excluding the impact of all acquisitions and divestitures, and currency, on an adjusted operational basis, worldwide sales rose 4.7%. 

In the MedTech segment, sales rose 5.9% in the United States and 3.2% outside of the United States on an operational basis. 

The MedTech business has improved in the last four quarters, driven by strong performance in three focus areas: Cardiovascular, Surgery and Vision. However, the company continues to face headwinds in China. Sales in China are being hurt by the impact of the VBP program. 

Cardiovascular sales rose 13% to $2.38 billion, driven by strong growth in electrophysiology and higher sales of Abiomed and Shockwave. The electrophysiology business has improved significantly in recent quarters, driven by new product launches including Varipulse and better commercial execution.

Worldwide Surgery rose 4.8% to $2.51 billion as growth in wound closure and biosurgery offset the impact of competitive pressure in energy and endocutters and VBP issues in China. Worldwide orthopedics rose 6.3% to $2.38 billion, driven by new product launches and strong commercial execution. Worldwide Vision rose 6.7% to $1.37 billion, driven primarily by higher growth in contact lenses and Surgical Vision, partially offset by competitive pressures in some categories in Surgical Vision.

Slightly Ups 2026 Guidance

J&J raised its 2026 sales guidance range from $100.0 billion-$101.0 billion to $100.3 billion – $101.3 billion. The sales projection indicates growth in the range of 6.5%-7.5% versus the prior expectation of 6.2%-7.2%. Operational sales growth is expected in the range of 5.9%-6.9% versus the prior expectation of 5.7%-6.7%. 

Adjusted operational sales (excluding currency impact, acquisitions/divestitures) growth is expected in the range of 5.6%-6.6% versus the prior expectation of 5.4%-6.4%.

J&J expects fairly consistent operational sales growth throughout the year with a higher fourth quarter due to the benefit from the 53rd week.

Adjusted earnings per share guidance was raised from a range of $11.43-$11.63 to $11.45-$11.65 per share. On an operational, constant-currency basis, adjusted earnings per share are expected to increase in the range of 6.1%-8.1% versus the prior expectation of 5.9%-7.9%.

On the first-quarter conference call, J&J said that it is off to a strong start to the year with accelerated momentum expected throughout the year and in 2027. J&J said that it expects to achieve double-digit top-line growth by the end of the decade.

J&J expects higher earnings per share growth in the second half of the year versus the first half due to higher costs expected in the first half of the year to support product launches.

Adjusted pretax operating margin is expected to improve by approximately 50 basis points.

The company projects net interest expense to be between $300 million and $400 million. Adjusted tax rate is expected to be approximately 17.5% to 18.5%.

J&J expects accelerated growth in both the Innovative Medicine and MedTech segments in 2026.

In 2026, J&J expects accelerated growth in the Innovative Medicine segment despite the loss of exclusivity of Stelara. The growth is expected to be driven by its key products, such as Darzalex, Tremfya, Spravato, Carvykti and Erleada as well as increased contribution from new launches like Icotyde, Rybrevant, and Inlexzo. J&J expects a more pronounced impact from new products in 2026 than 2025. J&J expects that contributions from its new product launches will increase as the year progresses. Other than Stelara LOE impact, J&J expects generic impact for both Simponi and Opsumit to begin in 2026.

In the MedTech segment, J&J expects better growth than 2025 levels, driven by increased adoption of newly launched products across Cardiovascular, Surgery and Vision portfolios.

Hikes Dividend

J&J announced a 3.1% increase in its quarterly dividend to $1.34 per share, up from $1.30, marking its 64th consecutive year of dividend growth.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Johnson & Johnson has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Johnson & Johnson has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.