Shares of Johnson & Johnson (JNJ Quick QuoteJNJ - Free Report) initially dropped nearly 6% on Oct. 13, after announcing third-quarter 2026 results. Although JNJ beat Wall Street estimates on both the top and bottom lines, the stock initially declined primarily because its MedTech segment fell short of expectations.

However, the MedTech giant's stock has recovered over the subsequent days, rising 2.1% since the earnings announcement.

With JNJ’s management citing ongoing geopolitical headwinds — such as the Middle East conflict and pricing pressure in China — investors may remain cautious about buying the shares at current levels. 

At the same time, JNJ’s fundamental strength remains evident. The company modestly raised its full-year 2026 revenue and earnings guidance, while its shares have surged 22.4% year to date, comfortably outpacing the S&P 500’s 12.1% gain.

Against this backdrop, investing in healthcare exchange-traded funds (ETFs) with high JNJ exposure offers a balanced alternative. This strategy allows investors to capture JNJ's growth momentum while mitigating single-stock risk through broader sector diversification.

But before suggesting a few such healthcare ETFs for your portfolio, let us take a look at JNJ's overall third-quarter performance.

A Brief Look at JNJ's Q3 Results

JNJ's third-quarter adjusted earnings per share (EPS) of $2.59 beat the Zacks Consensus Estimate by 2.4%, while sales missed the consensus mark by a whisker. 

On a year-over-year basis, the company’s bottom line deteriorated owing to expenses associated with the Firefly Bio transaction and Sail Biomedicines collaboration.

Within the Immunology division, JNJ’s TREMFYA medication delivered exceptional sales growth of 68% in the third quarter, driven by continued momentum from the IBD launch, along with share growth in both ulcerative colitis and Crohn's disease.

However, STELARA declined 54%, owing to continued competitive pressures from biosimilars and the ongoing shift toward novel classes.
More than 20,000 patients have initiated therapy through nearly 9,000 prescribers since ICOTYDE's launch in the United States.  ICOTYDE is JNJ’s first-in-class targeted oral peptide for plaque psoriasis. 

JNJ’s CAPLYTA generated $1 billion in year-to-date sales, becoming the company’s 29th billion-dollar platform. Driven by strong uptake as an adjunctive treatment for major depressive disorder, CAPLYTA is now the fastest-growing oral branded therapy in this space (as per the company’s third-quarter transcript).

The company’s MedTech business, despite missing the Wall Street estimates, delivered 2.5% year-over-year sales growth, primarily driven by electrophysiology products and Shockwave in Cardiovascular, contact lenses in Vision, as well as trauma in Orthopaedics.

In oncology, JNJ’s DARZALEX delivered growth of 15.6%, primarily driven by strong share gains across all lines of therapy as well as continued market growth. TALVEY grew 42.1%, driven by market share gains due to increased depth of prescribing. Growth was further supported by deeper prescribing in the community setting.

Looking ahead, by the end of 2026, JNJ expects to receive U.S. FDA approval for its RYBREVANT FASPRO, a subcutaneous medication to treat advanced head and neck cancer.

Meanwhile, JNJ remains on track to meet its guidance and exceed $100 billion in annual revenues for the first time in its 140-year history.

Market Reaction Post Q3 Earnings

Following J&J's third-quarter results, Bernstein raised its price target to $270 from $261 while maintaining a Market Perform rating. On the other hand, RBC Capital maintained an Outperform rating but lowered its price target from $290 to $280.

JNJ-Heavy ETFs to Buy

iShares U.S. Pharmaceuticals ETF (IHE Quick QuoteIHE - Free Report)    

This fund, with net assets worth $1.51 billion, provides exposure to 53 U.S. domestic drug manufacturers and vaccine producers. Of these, Johnson and Johnson takes the second spot, accounting for a 21.70% share. 

IHE has rallied 18.6% year to date and charges 37 basis points (bps) in fees. It traded at a volume of 0.19 million shares in the last trading session.  

State Street Health Care Select Sector SPDR ETF (XLV Quick QuoteXLV - Free Report)

This fund, with assets under management (AUM) of $46.07 billion, provides exposure to 61 companies across pharmaceuticals, biotechnology, health care equipment and supplies, health care providers and services, life sciences tools and services, and health care technology industries. Of these, Johnson and Johnson takes the second spot, accounting for a 9.60% share. 

XLV has risen 13.5% year to date and charges 8 bps in fees. It traded at a heavy volume of around 6.03 million shares in the last trading session. 

Vanguard Health Care ETF (VHT Quick QuoteVHT - Free Report)   

This fund, with net assets worth $21.8 billion, provides exposure to 412 companies that manufacture health care equipment and supplies or that provide health care-related services, and companies that are primarily involved in the research, development, production, and marketing of pharmaceuticals and biotechnology products. Of these, Johnson and Johnson takes the second spot, accounting for an 8.78% share.

VHT has risen 4.2% year to date and charges 9 bps in fees. It traded at a volume of around 0.23 million shares in the last trading session.