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.
Can J&J's MedTech Business Rebound in Q3 After Q2 Slowdown?
Read MoreHide Full Article
Key Takeaways
J&J's MedTech growth slowed in Q2 as weaker Cardiovascular sales offset strong Shockwave growth.
Abiomed's weakness may persist, but Vision, Orthopedics and Surgery are expected to accelerate in Q3.
China's VBP program and competition remain headwinds, though MedTech is expected to improve 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 Medicine business. Sales were hurt by weaker sales in Cardiovascular, as competitive pressure in electrophysiology and lower Abiomed sales offset continued double-digit growth at Shockwave. Abiomed sales declined in the second quarter due to slow procedural volumes for the Impella heart pump franchise.
On its third-quarter conference call, investors will await information on whether sales in the MedTech segment improved from the first-quarter slowdown. Here’s what we expect.
J&J expects only modest Abiomed growth in the second half of 2026. While J&J’s Cardiovascular sales may continue to be slow in the third quarter due to weakness in Abiomed, its other three businesses, Surgery, Vision and Orthopedics, are likely to have continued to accelerate in the third quarter. While Abiomed procedures slowed, J&J claimed that overall procedure volumes were stable in the second quarter and there was no broad-based slowdown in medical procedure volumes across its MedTech business. An update on procedure trends in the third quarter is expected on the conference call.
The company continues to face headwinds in China from the government's volume-based procurement (VBP) program, with these pressures expected to continue in the second half. Competitive pressures are also expected to continue to hurt sales growth in some MedTech businesses in the third quarter.
Overall, the MedTech business is expected 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. The Zacks Consensus Estimate for J&J’s MedTech segment stands at $8.78 billion.
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, such as 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 22.2% this year compared with 9.4% 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 20.43 forward earnings, higher than 17.60 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 declined from $11.59 to $11.54 over the past 60 days, while that for 2027 earnings has declined from $12.80 per share to $12.64 over the same time frame.
View the Zacks #1 Rank List
Image: Bigstock
Can J&J's MedTech Business Rebound in Q3 After Q2 Slowdown?
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 Medicine business. Sales were hurt by weaker sales in Cardiovascular, as competitive pressure in electrophysiology and lower Abiomed sales offset continued double-digit growth at Shockwave. Abiomed sales declined in the second quarter due to slow procedural volumes for the Impella heart pump franchise.
On its third-quarter conference call, investors will await information on whether sales in the MedTech segment improved from the first-quarter slowdown. Here’s what we expect.
J&J expects only modest Abiomed growth in the second half of 2026. While J&J’s Cardiovascular sales may continue to be slow in the third quarter due to weakness in Abiomed, its other three businesses, Surgery, Vision and Orthopedics, are likely to have continued to accelerate in the third quarter. While Abiomed procedures slowed, J&J claimed that overall procedure volumes were stable in the second quarter and there was no broad-based slowdown in medical procedure volumes across its MedTech business. An update on procedure trends in the third quarter is expected on the conference call.
The company continues to face headwinds in China from the government's volume-based procurement (VBP) program, with these pressures expected to continue in the second half. Competitive pressures are also expected to continue to hurt sales growth in some MedTech businesses in the third quarter.
Overall, the MedTech business is expected 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. The Zacks Consensus Estimate for J&J’s MedTech segment stands at $8.78 billion.
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, such as 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 22.2% this year compared with 9.4% 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 20.43 forward earnings, higher than 17.60 for the industry. The stock is also trading above its five-year mean of 15.65.
The Zacks Consensus Estimate for 2026 earnings has declined from $11.59 to $11.54 over the past 60 days, while that for 2027 earnings has declined from $12.80 per share to $12.64 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.