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.
J&J Faces Multiple Headwinds: Can the Healthcare Giant Sustain Growth?
Read MoreHide Full Article
Key Takeaways
J&J faces pressure from Stelara's LOE, upcoming Opsumit and Simponi expiries, and MedTech weakness.
Abiomed sales fell 2% as physicians reassessed Impella use after a U.K. clinical trial raised concerns.
J&J targets about $100 billion in 2026 revenues, with double-digit growth in sight by decade's end.
Johnson & Johnson (JNJ - Free Report) continues to deliver solid operating performance, but its growth story faces several important challenges. The company is navigating the impact of major patent expirations, including the loss of exclusivity (LOE) for Stelara, while upcoming LOEs could add further pressure to its Innovative Medicine business. At the same time, weakness in parts of its MedTech portfolio, pricing pressure in key markets and lingering talc-related litigation remain concerns for investors. Let’s examine these key headwinds and assess whether the healthcare giant is well-positioned to overcome them and sustain its long-term growth trajectory.
Stelara LOE & Upcoming Patent Expiries Weigh on J&J’s Growth
The biggest long-term challenge for J&J is the loss of exclusivity for some of its key drugs.
J&J lost U.S. patent exclusivity of Stelara in 2025. Stelara was a key top-line driver for J&J, accounting for around 18% of J&J’s Innovative Medicine unit’s sales in 2024, before it lost patent exclusivity in 2025.
Several biosimilar versions of Stelara were launched in the United States in 2025 as the drug lost patent exclusivity. According to patent settlements and license agreements, Amgen (AMGN - Free Report) , Teva Pharmaceutical Industries (TEVA - Free Report) , Alvotech, Samsung Bioepis/Sandoz and some other companies launched Stelara biosimilars.
Stelara’s LOE negatively impacted the Innovative Medicines segment’s growth by 10.4% in 2025 and 8.4% in the first half of 2026.
In addition, J&J expects generic competition for both Simponi and Opsumit to weigh on sales in 2026 as the drugs face loss of patent protection. Biosimilars for Simponi entered the European market in the second quarter of 2026, with a potential U.S. entrant later in the year. Generic competition for Opsumit entered the U.S. market late in the second quarter, which is expected to pressure sales in the second half.
Abiomed Weakness & China Headwinds Hurt J&J’s MedTech Growth
Sales in J&J's Abiomed business under the MedTech segment declined 2% in the second quarter as procedure volumes slowed following changes in Impella usage after a recent U.K. clinical trial raised questions about the device’s benefit in certain high-risk procedures, prompting physicians to reassess patient selection and adopt a more cautious approach to using the device.
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. The impact of the U.K. study is expected to linger and hurt Abiomed’s growth until the PROTECT IV data is presented in 2027. PROTECT IV is a large clinical trial of the company’s Impella device in high-risk percutaneous coronary intervention.
Sales in J&J’s MedTech business are facing continued 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 2026, mainly in the second half. Competitive pressure is also hurting sales growth in some MedTech businesses.
J&J’s Talc Litigation Nears Resolution but Remains a Key Investor Concern
J&J faces approximately 76,000 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. While the company has taken steps to resolve many of these matters, litigation has remained an overhang for a long time that has resulted in high costs, negative headlines and weighed on investor sentiment.
Though the issue is close to resolution, it has not yet been fully resolved. In July 2026, J&J agreed to a $5.5 billion settlement covering nearly all its remaining talc litigation. The agreement requires participation by plaintiff firms representing at least 95% of the remaining claims before it becomes effective. J&J expects the first payment of up to $3 billion in 2027, with additional payments beginning in 2028.
Can J&J Navigate the Challenges?
J&J has delivered consistent earnings and sales growth, supported by strong growth of oncology drugs and newer medicines.
The company expects 2026 to be a year of accelerated growth. The company is confident that it can achieve its target of generating around $100 billion in revenues in 2026. It expects sales to continue to improve in 2027, with a “line of sight” to double-digit growth by the end of the decade. J&J believes that it is already achieving this growth. Though J&J’s total revenues are currently rising in a mid-single-digit range, excluding Stelara, J&J’s top line grew in a double-digit range in both the first and second quarters of 2026.
J&J also 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.
Despite headwinds like the Stelara patent cliff, the upcoming LOE of key drugs Opsumit and Simponi, and softness in MedTech, J&J looks quite confident that it will be able to navigate these challenges.
JNJ’s Price Performance, Valuation and Estimates
J&J’s shares have outperformed the industry so far this year. The stock has risen 31.1% year to date compared with 13.0% appreciation of the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, J&J is expensive. Going by the price/earnings ratio, the company’s shares currently trade at 21.86 forward earnings, higher than 18.55 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 $11.59 per share over the past 60 days, while that for 2027 earnings has gone up from $12.65 per share to $12.80 over the same time frame.
View the Zacks #1 Rank List
Image: Bigstock
J&J Faces Multiple Headwinds: Can the Healthcare Giant Sustain Growth?
Key Takeaways
Johnson & Johnson (JNJ - Free Report) continues to deliver solid operating performance, but its growth story faces several important challenges. The company is navigating the impact of major patent expirations, including the loss of exclusivity (LOE) for Stelara, while upcoming LOEs could add further pressure to its Innovative Medicine business. At the same time, weakness in parts of its MedTech portfolio, pricing pressure in key markets and lingering talc-related litigation remain concerns for investors. Let’s examine these key headwinds and assess whether the healthcare giant is well-positioned to overcome them and sustain its long-term growth trajectory.
Stelara LOE & Upcoming Patent Expiries Weigh on J&J’s Growth
The biggest long-term challenge for J&J is the loss of exclusivity for some of its key drugs.
J&J lost U.S. patent exclusivity of Stelara in 2025. Stelara was a key top-line driver for J&J, accounting for around 18% of J&J’s Innovative Medicine unit’s sales in 2024, before it lost patent exclusivity in 2025.
Several biosimilar versions of Stelara were launched in the United States in 2025 as the drug lost patent exclusivity. According to patent settlements and license agreements, Amgen (AMGN - Free Report) , Teva Pharmaceutical Industries (TEVA - Free Report) , Alvotech, Samsung Bioepis/Sandoz and some other companies launched Stelara biosimilars.
Stelara’s LOE negatively impacted the Innovative Medicines segment’s growth by 10.4% in 2025 and 8.4% in the first half of 2026.
In addition, J&J expects generic competition for both Simponi and Opsumit to weigh on sales in 2026 as the drugs face loss of patent protection. Biosimilars for Simponi entered the European market in the second quarter of 2026, with a potential U.S. entrant later in the year. Generic competition for Opsumit entered the U.S. market late in the second quarter, which is expected to pressure sales in the second half.
Abiomed Weakness & China Headwinds Hurt J&J’s MedTech Growth
Sales in J&J's Abiomed business under the MedTech segment declined 2% in the second quarter as procedure volumes slowed following changes in Impella usage after a recent U.K. clinical trial raised questions about the device’s benefit in certain high-risk procedures, prompting physicians to reassess patient selection and adopt a more cautious approach to using the device.
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. The impact of the U.K. study is expected to linger and hurt Abiomed’s growth until the PROTECT IV data is presented in 2027. PROTECT IV is a large clinical trial of the company’s Impella device in high-risk percutaneous coronary intervention.
Sales in J&J’s MedTech business are facing continued 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 2026, mainly in the second half. Competitive pressure is also hurting sales growth in some MedTech businesses.
J&J’s Talc Litigation Nears Resolution but Remains a Key Investor Concern
J&J faces approximately 76,000 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. While the company has taken steps to resolve many of these matters, litigation has remained an overhang for a long time that has resulted in high costs, negative headlines and weighed on investor sentiment.
Though the issue is close to resolution, it has not yet been fully resolved. In July 2026, J&J agreed to a $5.5 billion settlement covering nearly all its remaining talc litigation. The agreement requires participation by plaintiff firms representing at least 95% of the remaining claims before it becomes effective. J&J expects the first payment of up to $3 billion in 2027, with additional payments beginning in 2028.
Can J&J Navigate the Challenges?
J&J has delivered consistent earnings and sales growth, supported by strong growth of oncology drugs and newer medicines.
The company expects 2026 to be a year of accelerated growth. The company is confident that it can achieve its target of generating around $100 billion in revenues in 2026. It expects sales to continue to improve in 2027, with a “line of sight” to double-digit growth by the end of the decade. J&J believes that it is already achieving this growth. Though J&J’s total revenues are currently rising in a mid-single-digit range, excluding Stelara, J&J’s top line grew in a double-digit range in both the first and second quarters of 2026.
J&J also 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.
Despite headwinds like the Stelara patent cliff, the upcoming LOE of key drugs Opsumit and Simponi, and softness in MedTech, J&J looks quite confident that it will be able to navigate these challenges.
JNJ’s Price Performance, Valuation and Estimates
J&J’s shares have outperformed the industry so far this year. The stock has risen 31.1% year to date compared with 13.0% appreciation of the industry.
From a valuation standpoint, J&J is expensive. Going by the price/earnings ratio, the company’s shares currently trade at 21.86 forward earnings, higher than 18.55 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 $11.59 per share over the past 60 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.