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J&J's MedTech Performance Slows in Q2: Will Sales Improve in H2?
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Key Takeaways
Johnson & Johnson's MedTech sales rose 4.5% to $8.93B in Q2 but slightly missed consensus estimates.
JNJ expects stronger H2 MedTech growth despite softer Abiomed demand and ongoing China VBP headwinds.
Johnson & Johnson expects new OTTAVA and VARIPULSE launches to support MedTech growth in H2.
Johnson & Johnson's (JNJ - Free Report) medical devices segment, known as MedTech, offers products in the orthopedics, surgery, cardiovascular and vision markets. The MedTech segment accounts for around 36% of J&J’s total revenues. In MedTech, J&J is a global leader in electrophysiology, circulatory restoration and heart recovery.
The MedTech segment delivered a mixed performance in the second quarter of 2026, with growth remaining positive but below the pace seen in its Innovative Medicines business.
Q2 Numbers of J&J’s MedTech Segment
J&J’s MedTech segment underperformed in the second quarter despite overall solid results. Sales rose 4.5% to $8.93 billion, with operational growth of 3.6%, but slightly missed the Zacks Consensus Estimate of $8.96 billion.
The shortfall was largely due to weaker Cardiovascular performance. Operational sales in the Cardiovascular business grew 3.1%. However, the growth was slower than prior trends due to competitive pressure in the electrophysiology business and decline in Abiomed sales, partially offset by continued double-digit growth in Shockwave.
Shockwave revenues rose 14.6% to $335 million. Electrophysiology sales increased 3.1%, supported by procedure growth and new products but were hurt by competitive pulsed field ablation (PFA) pressures and unfavorable China inventory dynamics.
Abiomed sales declined 2% due to slow procedural volumes for the Impella heart pump franchise. Abiomed procedure volumes were hurt by uncertainty among physicians after a U.K. study questioned the benefit of using Impella devices in certain high-risk procedures. J&J believes this led to slower Impella usage as doctors reassessed patient selection for the device. J&J believes this is a temporary issue and is working with physicians to ensure the device is used in the right patients based on its existing clinical evidence. However, Abiomed sales in outside U.S. markets remained strong.
Nonetheless, while J&J’s Cardiovascular sales slowed down in the second quarter due to weakness in Abiomed, its other three businesses, Surgery, Vision and Orthopedics, all accelerated in the quarter and performed above expectations.
Worldwide Surgery grew 3.9%. Worldwide Orthopedics rose 4.9% and Worldwide Vision rose 6.0% in the second quarter.
While Abiomed procedures slowed, J&J claimed that overall procedure volumes were stable and there was no broad-based slowdown in medical procedure volumes across its MedTech business. J&J clarified that although some large U.S. hospitals have reported weaker volumes for certain elective procedures, those trends are not reflected in its own business. J&J also said that the expiration of Affordable Care Act (ACA) subsidies has not had any meaningful impact on procedure volumes so far and is unlikely to affect MedTech demand materially.
The company continues to face headwinds in China from the government's volume-based procurement (VBP) program and expects these pressures to continue through 2026, particularly in the second half.
Outlook for J&J’s MedTech in H2
Reflecting these challenges, J&J tempered its outlook for Abiomed, now expecting only modest growth in the second half of 2026 rather than the stronger rebound it had previously anticipated, with the impact of the U.K. study likely to persist until PROTECT IV study data are presented in 2027. PROTECT IV is a large clinical study of the company’s Impella device in high-risk percutaneous coronary intervention.
Despite the Abiomed challenges, J&J remains optimistic about MedTech's trajectory in the second half of 2026. J&J expects its MedTech business to perform better in the second half of the year than it did in the first half, driven by strength in Vision, Orthopedics, Surgery and better performance in Cardiovascular. While the Abiomed softness creates a new overhang, it is only 2% of sales, and J&J has various other top-line drivers to compensate.
The FDA recently approved J&J’s OTTAVA robotic surgical system which is considered a key new product in its portfolio, along with the VARIPULSE pulsed field ablation system for atrial fibrillation. Increased adoption of these newly launched products should contribute to better growth in the second half.
J&J’s Key Competitors in the Medical Devices Market
J&J’s MedTech unit faces strong competition from several major players in the medical device industry like Medtronic (MDT - Free Report) , Abbott,Stryker (SYK - Free Report) and Boston Scientific (BSX - Free Report) .
While Medtronic has a strong presence in cardiovascular, neuroscience and surgical technologies, Stryker is a major player in orthopedics and surgical equipment. Boston Scientific markets products for cardiovascular, endoscopy, urology and neuromodulation. Abbott is known for its medical devices across cardiovascular, diagnostics, and diabetes care.
JNJ’s Price Performance, Valuation and Estimates
J&J’s shares have outperformed the industry so far this year. The stock has risen 28.7% this year compared with a 14.5% appreciation of the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 21.39 forward earnings, higher than 19.06 for the industry. The stock is also trading above its five-year mean of 15.65.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings has risen from $11.58 per share to $11.65 per share over the past 30 days, while that for 2027 earnings has gone up from $12.65 per share to $12.80 over the same time frame.
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J&J's MedTech Performance Slows in Q2: Will Sales Improve in H2?
Key Takeaways
Johnson & Johnson's (JNJ - Free Report) medical devices segment, known as MedTech, offers products in the orthopedics, surgery, cardiovascular and vision markets. The MedTech segment accounts for around 36% of J&J’s total revenues. In MedTech, J&J is a global leader in electrophysiology, circulatory restoration and heart recovery.
The MedTech segment delivered a mixed performance in the second quarter of 2026, with growth remaining positive but below the pace seen in its Innovative Medicines business.
Q2 Numbers of J&J’s MedTech Segment
J&J’s MedTech segment underperformed in the second quarter despite overall solid results. Sales rose 4.5% to $8.93 billion, with operational growth of 3.6%, but slightly missed the Zacks Consensus Estimate of $8.96 billion.
The shortfall was largely due to weaker Cardiovascular performance. Operational sales in the Cardiovascular business grew 3.1%. However, the growth was slower than prior trends due to competitive pressure in the electrophysiology business and decline in Abiomed sales, partially offset by continued double-digit growth in Shockwave.
Shockwave revenues rose 14.6% to $335 million. Electrophysiology sales increased 3.1%, supported by procedure growth and new products but were hurt by competitive pulsed field ablation (PFA) pressures and unfavorable China inventory dynamics.
Abiomed sales declined 2% due to slow procedural volumes for the Impella heart pump franchise. Abiomed procedure volumes were hurt by uncertainty among physicians after a U.K. study questioned the benefit of using Impella devices in certain high-risk procedures. J&J believes this led to slower Impella usage as doctors reassessed patient selection for the device. J&J believes this is a temporary issue and is working with physicians to ensure the device is used in the right patients based on its existing clinical evidence. However, Abiomed sales in outside U.S. markets remained strong.
Nonetheless, while J&J’s Cardiovascular sales slowed down in the second quarter due to weakness in Abiomed, its other three businesses, Surgery, Vision and Orthopedics, all accelerated in the quarter and performed above expectations.
Worldwide Surgery grew 3.9%. Worldwide Orthopedics rose 4.9% and Worldwide Vision rose 6.0% in the second quarter.
While Abiomed procedures slowed, J&J claimed that overall procedure volumes were stable and there was no broad-based slowdown in medical procedure volumes across its MedTech business. J&J clarified that although some large U.S. hospitals have reported weaker volumes for certain elective procedures, those trends are not reflected in its own business. J&J also said that the expiration of Affordable Care Act (ACA) subsidies has not had any meaningful impact on procedure volumes so far and is unlikely to affect MedTech demand materially.
The company continues to face headwinds in China from the government's volume-based procurement (VBP) program and expects these pressures to continue through 2026, particularly in the second half.
Outlook for J&J’s MedTech in H2
Reflecting these challenges, J&J tempered its outlook for Abiomed, now expecting only modest growth in the second half of 2026 rather than the stronger rebound it had previously anticipated, with the impact of the U.K. study likely to persist until PROTECT IV study data are presented in 2027. PROTECT IV is a large clinical study of the company’s Impella device in high-risk percutaneous coronary intervention.
Despite the Abiomed challenges, J&J remains optimistic about MedTech's trajectory in the second half of 2026. J&J expects its MedTech business to perform better in the second half of the year than it did in the first half, driven by strength in Vision, Orthopedics, Surgery and better performance in Cardiovascular. While the Abiomed softness creates a new overhang, it is only 2% of sales, and J&J has various other top-line drivers to compensate.
The FDA recently approved J&J’s OTTAVA robotic surgical system which is considered a key new product in its portfolio, along with the VARIPULSE pulsed field ablation system for atrial fibrillation. Increased adoption of these newly launched products should contribute to better growth in the second half.
J&J’s Key Competitors in the Medical Devices Market
J&J’s MedTech unit faces strong competition from several major players in the medical device industry like Medtronic (MDT - Free Report) , Abbott,Stryker (SYK - Free Report) and Boston Scientific (BSX - Free Report) .
While Medtronic has a strong presence in cardiovascular, neuroscience and surgical technologies, Stryker is a major player in orthopedics and surgical equipment. Boston Scientific markets products for cardiovascular, endoscopy, urology and neuromodulation. Abbott is known for its medical devices across cardiovascular, diagnostics, and diabetes care.
JNJ’s Price Performance, Valuation and Estimates
J&J’s shares have outperformed the industry so far this year. The stock has risen 28.7% this year compared with a 14.5% appreciation of the industry.
From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 21.39 forward earnings, higher than 19.06 for the industry. The stock is also trading above its five-year mean of 15.65.
The Zacks Consensus Estimate for 2026 earnings has risen from $11.58 per share to $11.65 per share over the past 30 days, while that for 2027 earnings has gone up from $12.65 per share to $12.80 over the same time frame.
J&J has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.