It has been about a month since the last earnings report for Johnson & Johnson (JNJ Quick QuoteJNJ - Free Report) . Shares have added about 10.4% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Johnson & Johnson due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Q3 Earnings Beat Estimates, Sales Miss

J&J’s third-quarter 2026 adjusted earnings came in at $2.59 per share, beating the Zacks Consensus Estimate of $2.53. Earnings declined 7.5% from the year-ago period due to costs related to recent business development transactions.

Adjusted earnings exclude intangible amortization expense and special items. Including these items, reported earnings were 9 cents per share, down 95.8% year over year. Reported earnings reflected a significant one-time special charge related to the proposed talc litigation resolution and the impact of recent business development transactions - Firefly Bio transaction and Sail Biomedicines collaboration.

Sales came in at $25.4 billion, marginally missing the Zacks Consensus Estimate of $25.44 billion. Sales rose 5.9% year over year. 

Operational sales increased 6%, while adjusted operational sales (excluding the impact of acquisitions/divestitures and currency) rose 6.1%. Operational sales improved sequentially from 5.6% recorded in the second quarter.

Domestic sales rose 9.1% to $14.96 billion. International sales increased 1.5% to $10.44 billion, reflecting operational growth of 1.8% and an unfavorable currency impact of 0.3%.

Segment Details

Innovative Medicines Segment

Innovative Medicine sales rose 7.7% year over year to $16.76 billion. Operational sales increased 7.9%, while adjusted operational growth was 8%. U.S. sales advanced 11.1%, while international sales increased 2.4% on a reported basis. Innovative Medicine sales beat the Zacks Consensus Estimate of $16.68 billion.

Higher sales of key products such as Darzalex, Tremfya and Erleada drove the segment’s growth. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant/Lazcluze, Spravato and Caplyta also contributed. These gains were partly offset by lower sales of Stelara, Remicade, Simponi/Simponi Aria, Imbruvica and Opsumit/Opsynvi.

Stelara's loss of exclusivity negatively impacted Innovative Medicine's operational growth by approximately 690 basis points.

In the Innovative Medicine segment, sales rose 11.1% in the United States and 3.0% outside of the United States on an operational basis

Oncology 

Worldwide oncology sales increased 16.4% to $7.60 billion. 

Darzalex rose 15.4% to $4.24 billion, driven by continued share gains across all lines of therapy, particularly the front-line setting, as well as continued market growth, partially offset by outside U.S. pricing headwinds. Darzalex sales missed the Zacks Consensus Estimate of $4.33 billion

Imbruvica sales declined 18.8% to $563 million. Rising competitive pressure in the United States due to new oral competition has been hurting Imbruvica's sales for the past few quarters. Imbruvica sales missed the consensus estimate of $602 million

Erleada sales increased 9.4% to $1.02 billion, driven by share gains and market growth, partially offset by unfavorable patient mix. Erleada sales missed the Zacks Consensus Estimate of $1.07 billion.
    
Among newer cancer drugs, Carvykti sales surged 35.5% to $710 million, driven by share gains across earlier lines of therapy and continued capacity expansion. Another new drug, Tecvayli sales jumped 76.6% to $312 million, driven by launch uptake and share gains across earlier lines of therapy following last quarter’s launch of Tecvayli plus Darzalex Faspro for relapsed/refractory multiple myeloma.

Talvey revenues increased 40.9% to $171 million, driven by continued expansion into the community setting. 

Rybrevant/Lazcluze sales climbed 62.3% to $320 million, driven by continued launch uptake in all regions, share gains and the rapid uptake of Rybrevant Faspro.

Regarding, J&J’s newly launched therapy, Inlexzo, J&J said it has generated year-to-date sales of approximately $200 million, including slightly more than $90 million in the third quarter, reflecting sequential growth.

Immunology

Worldwide immunology sales increased 1.3% to $4.22 billion despite continued biosimilar competition for Stelara. Sales of Stelara declined 54.4% to $716 million but exceeded the Zacks Consensus Estimate of $651 million. 

Tremfya remained a key growth driver, with sales surging 68.3% to $2.40 billion, driven by share gains across all indications, particularly the IBD indications as well as continued market growth. Tremfya sales beat the Zacks Consensus Estimate of $2.28 billion.

Remicade revenues decreased 17.3% to $394 million. Simponi/Simponi Aria sales declined 17.3% to $568 million due to market-share losses, biosimilar competition, and an unfavorable patient mix. Biosimilars for Simponi entered the European market in the second quarter of 2026 while in the United States, biosimilars are approved but not yet launched.

The company said on the call that launches of new drugs, Imaavy and Icotyde, are off to strong starts.

Neuroscience, PH and Other Drugs

Neuroscience sales increased 17.3% to $2.38 billion, supported by strong demand for Spravato and Caplyta. Spravato revenues grew 36.1% to $624 million, driven by strong demand trends and physician adoption.


Caplyta sales advanced 66.1% to $398 million, backed by continued launch momentum in adjunctive major depressive disorder and continued demand increases across bipolar disorder and schizophrenia. Caplyta reached $1 billion in year-to-date sales, making it J&J’s 29th billion-dollar platform. 

Invega Sustenna/Xeplion/Invega Trinza/Trevicta sales increased 7.3% to $998 million.

Pulmonary hypertension drug Uptravi recorded sales of $483 million, down 0.1%. Opsumit/Opsynvi sales declined 35.7% to $372 million as generic drugs entered the U.S. market late in the second quarter.

Xarelto revenues increased 2.7% to $653 million. Sales of Prezista/Prezcobix/Rezolsta/Symtuza declined 3.8% to $381 million.  

MedTech Segment

MedTech sales increased 2.5% year over year to $8.64 billion but missed the Zacks Consensus Estimate of $8.77 billion. Operational sales increased 2.5%.

Excluding the impact of acquisitions and divestitures and currency, on an adjusted operational basis, worldwide sales rose 2.5%. 

In the MedTech segment, sales rose 4.8% in the United States and 0.1% outside of the United States on an operational basis. 

MedTech’s operational sales growth fell short of management’s expectations. 

Cardiovascular sales rose 4.3% to $2.31 billion. Electrophysiology revenues increased 4.9% to $1.49 billion, driven by procedure expansion, commercial execution and new product performance, partially offset by competitive PFA pressures, particularly in Asia-Pacific. Shockwave sales grew 16.8% to $325 million, driven by continued adoption of coronary and peripheral products as well as new product launches. 

Abiomed sales declined 2.3% to $412 million in the quarter due to lower patient volumes. Over the past two quarters, MedTech’s Abiomed sales have declined due to slow procedural volumes driven by usage patterns.  The slowdown followed a recent U.K. clinical trial that questioned the benefit of Impella devices in certain high-risk procedures, prompting physicians to reassess patient selection and adopt a more cautious approach to using the device. 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 (PCI).

Worldwide Surgery declined 0.6% to $2.53 billion, primarily due to expanded volume-based procurement in China, the impact of J&J’s surgery transformation program, and Middle East disruptions to tender timing and ordering patterns. Worldwide orthopedics rose 3.2% to $2.35 billion, driven by new product launches and strong commercial execution. Worldwide Vision revenues increased 4.4% to $1.46 billion, driven primarily by higher growth in contact lenses and Surgical Vision, partially offset by inventory dynamics in contact lenses and disruptions in the Middle East in Surgical Vision.

J&J expects improved performance in MedTech in the fourth quarter, with stronger growth expected in 2027. J&J expects Surgery to return to growth in the fourth quarter, helped by continued growth in the United States and acceleration in EMEA.

Raises 2026 Guidance

J&J raised the lower end of its 2026 sales guidance to $101.0-$101.4 billion from $100.8-$101.4 billion. The revised projection indicates sales growth of 7.2%-7.6% compared with the previous expectation of 7.0%-7.6%.

Operational sales growth is expected in the range of 6.7%-7.1% versus the prior expectation of 6.5% -7.1%.

Adjusted operational sales growth is now expected between 6.4% and 6.8% compared with the earlier projection of 6.2%-6.8%.

The adjusted earnings per share guidance was raised to $11.05-$11.15 from $10.96-$11.11. The revised guidance indicates adjusted earnings growth of 2.4%-3.3% compared with the previous expectation of 1.6%-3.0%.

Adjusted pretax operating margin is expected to decline by approximately 60 basis points, which is an improvement from the prior expectation of a decline of 75 basis points.

The company projects net interest expense to be between $150 million to $200 million, lower than the prior expectation of $250 million to $300 million. The adjusted tax rate is expected to be approximately 17.0% to17.5% (previous expectations: 17.0% to 18.0%).

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Johnson & Johnson has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Johnson & Johnson has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.