Johnson & Johnson (JNJ Quick QuoteJNJ - Free Report) will begin the earnings season for the drug & biotech sector when it reports its third-quarter 2026 results on Oct. 13. The Zacks Consensus Estimate for third-quarter sales and earnings is pegged at $25.37 billion and $2.66 per share, respectively.

The Zacks Consensus Estimate for 2026 earnings has declined from $11.48 to $11.21 over the past 60 days, while that for 2027 earnings has declined from $12.81 per share to $12.17 over the same time frame.

JNJ Estimate Movement

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JNJ’s Earnings Surprise History

The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 1.39%, on average. In the last reported quarter, the company delivered an earnings surprise of 2.11%.

JNJ’s EPS Surprise

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J&J has an Earnings ESP of +2.10% and a Zacks Rank #3 (Hold), indicating a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Shaping JNJ’s Upcoming Results

Sales in J&J’s Innovative Medicine segment are expected to have been driven by higher sales of key products such as Darzalex, Erleada, Carvykti, Tecvayli and Rybrevant/Lazcluze in oncology; Tremfya and other immunology products; and Spravato and Caplyta in neuroscience. Darzalex, Carvykti, Tecvayli and Rybrevant/Lazcluze are all benefiting from expanding use and additional indications.

The Zacks Consensus Estimate for Darzalex, Tremfya and Erleada is pegged at $4.33 billion, $2.24 billion and $1.07 billion, respectively.

Other products like Invega Sustenna/Xeplion/Invega Trinza/Trevicta, Uptravi and Opsumit are likely to have witnessed continued growth.

J&J also expects an increased contribution from newer launches in the third quarter than in the second quarter. Its new drugs are Inlexzoh, a first-of-its-kind drug-releasing system for treating high-risk non-muscle invasive bladder cancer, Imaavy (nipocalimab) for treating generalized myasthenia gravis, and Icotyde, an oral targeted peptide inhibitor of the IL-23 receptor for treating moderate-to-severe plaque psoriasis (PsO).

However, sales of Simponi/Simponi Aria and Remicade declined in the second quarter, a trend likely to have continued in the third quarter.

Also, generic/biosimilar competition for key drug, Stelara, and lower sales of Imbruvica are likely to have hurt top-line growth.

Sales of Stelara are likely to have declined due to the impact of biosimilar competition.

According to patent settlements and license agreements, Amgen (AMGN Quick QuoteAMGN - Free Report) ,Teva Pharmaceutical Industries (TEVA Quick QuoteTEVA - Free Report) , Samsung Bioepis/Sandoz and some other companies launched Stelara biosimilars in 2025 after the drug lost patent exclusivity in the United States. Stelara’s LOE negatively impacted the Innovative Medicine segment’s growth by 760 basis points in the second quarter. We expect the negative impact to have been steeper in the third quarter of 2026. The Zacks Consensus Estimate for Stelara sales is pegged at $634.0 million.

Biosimilars for Simponi entered the European market in the second quarter of 2026, while a generic version of Opsumit entered the U.S. market late in the second quarter, which may have hurt sales of these drugs in the third quarter.

Imbruvica sales are likely to have declined in the United States due to new oral competition. The Zacks Consensus Estimate for Imbruvica stands at $602.0 million.

Overall, J&J expects continued above-market growth in the Innovative Medicine segment in the third quarter. The Zacks Consensus Estimate for J&J’s Innovative Medicine unit is pegged at $16.7 billion.

Sales in J&J’s MedTech segment moderated in the second quarter due to weaker sales in Cardiovascular as competitive pressure in electrophysiology and lower Abiomed sales offset continued double-digit growth at Shockwave. J&J expects only modest Abiomed growth in the second half of 2026. While J&J’s Cardiovascular sales may remain slow in the third quarter due to weakness in Abiomed, its other three businesses, Surgery, Vision, and Orthopedics, are likely to have continued accelerating 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 $8.77 billion.

Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold J&J stock ahead of earnings.

JNJ’s Stock Price Performance & Valuation

J&J’s shares have outperformed the industry so far this year. The stock has risen 24.0% year to date compared with 11.9% appreciation of the industry. 

JNJ Stock Outperforms Industry

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From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 20.70 forward earnings, higher than 18.03 for the industry. The stock is also trading above its five-year mean of 15.65.

JNJ Stock Valuation

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Investment Thesis on JNJ

J&J’s biggest strength is its diversified business model, as it not only has pharmaceuticals but also medical devices, which help it withstand economic cycles more effectively.

J&J’s Innovative Medicines segment is the company’s primary growth engine despite Stelara LOE, driven by key drugs like Darzalex, Erleada and Tremfya. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato also contributed significantly to growth. J&J’s recent launches, including Inlexzo, Imaavy and Icotyde, are gaining traction and could become significant growth drivers in future quarters.

Though J&J’s MedTech growth slowed in the second quarter, the company expects the segment to do better in the second half.

J&J expects 2026 to be a year of accelerated growth. It is confident about achieving its target of generating more than $100 billion in revenues in 2026, with $49.4 billion already generated in the first half. 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, its top line grew in a double-digit range in both the first and second quarters of 2026.

J&J faces its share of headwinds like the Stelara patent cliff, the upcoming LOE of key drugs Opsumit and Simponi, and softness in MedTech. Though the litigation issue is close to resolution, it has not yet been fully resolved.

Stay Invested in J&J Stock

J&J enjoys a diversified revenue base, a large cash-generating business and a long history of returning capital to shareholders. It is witnessing steady sales and earnings growth, continued strength in its Innovative Medicine business, and improving fundamentals and outlook. Despite several headwinds, J&J looks quite confident that it will be able to navigate these challenges. J&J has also seen some positive developments recently surrounding its long-running talc litigation

No matter how the third-quarter’s results play out, one should stay invested in JNJ, considering its price appreciation, consistent earnings and sales growth, important new launches and pipeline depth.