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Johnson and Johnson (JNJ) earnings preview: will increasing competition slow down the growth?

4:29 pm ET, 12 Jul 2018

Johnson & Johnson (JNJ) is expected to report earnings on July 17 before market open.  The report will be for the fiscal quarter ending June 2018. Shares are trading at 126.53, up 0.06%.

What are JNJ earnings expectations?  What news will the market be watching out for?  

J&J holds a leadership role in diverse healthcare segments, including medical devices, over-the-counter products, and several pharmaceutical markets. Contributing just over 45% of total revenue, the pharmaceutical division boasts several industry-leading drugs, including immunology drug Remicade and psoriasis drug Stelara. 

The medical device group brings in more than one-third of sales, with the company holding controlling positions in many areas, including orthopedics and Ethicon Endo-Surgery's surgical devices. The consumer division largely rounds out the remaining business lines, and despite manufacturing issues over the past several years, the group still holds many brands with strong pricing power.

The pharmaceutical group has recently launched several new blockbusters. However, relative to the company's size, J&J needs to increase the number of meaningful drugs in late-stage development to support long-term growth. The company has also created new medical devices, including innovative contact lenses and minimally invasive surgical tools.

Diverse operating segments coupled with expected new products insulate the company more from patent losses relative to other Big Pharma firms. Further, in contrast to most of its peers, J&J faces the majority of its near-term patent losses on hard-to-make complex drugs, which should likely slow generic competition.

Johnson & Johnson has a history of beating analysts’ earnings estimates. In the past four quarters, the company: 

  • Beat analyst EPS estimates by 4 cents ($1.83 actuals vs. $1.79 forecast) in FQ2’17;
  • Beat analyst EPS estimates by 10 cents ($1.90 actuals vs. $1.80 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 2 cents ($1.74 actuals vs. $1.72 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 5 cents ($2.06 actuals vs. $2.01 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 13% year-over-year to $2.06, while revenue is expected to grow 7% year-over-year to $20.25 billion.  

Johnson & Johnson (JNJ) forward P/E ratio is 14.14, and it's in line with industry peers’ P/E ratios.

Johnson & Johnson (JNJ) average analyst price target ($143.68) is 13.55% above its current price ($126.53).

For the latest price and information on Johnson & Johnson, please visit Finstead and search for "JNJ price" or "JNJ news".

AbbVie (ABBV): Will The Stock Recover?

3:28 pm ET, 22 Mar 2018

AbbVie (NYSE: ABBV) diverted the Rova-T program today—and that led to its stock price fall by 13%. 

The program’s objective was to obtain a quick approval for the treatment of third-line refractory small cell lung cancer. 

In 2016, AbbVie pursued an expensive deal to acquire a biotech unicorn Stemcentrx for $5.8 Billion. It had bet on its lead product named Rova-T, which was targeted to approach the proteins that are found in tissues of people who have lung cancer.

After consultation with the FDA, AbbVie won’t try for accelerated approval of Rova-T in one type of small cell lung cancer This step has created a wave of disappointment among its investors.

What do the analysts say about ABBV? Per Finstead Research, ABBV’s average price target is almost $128.

The valuation of ABBV stock is relatively low compared to its peers. Only GILDPFE and BIIB are valued below ABBV based on the forward P/E ratio.

If you're a trader contemplating buying ABBV, there may be a point when the stock will bounce back. 

Johnson & Johnson (JNJ) Stock Guide

Updated at: 2:30 am ET, 18 Sep 2020

Before we start: if you're looking for JNJ stock price, you can quickly find it out by visiting Finny and typing "JNJ quote". If you're looking for a quick scoop on JNJ stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "JNJ". You'll get all this info in one place. Or you can just type "JNJ news" to get the latest stock news.

Looking to buy or sell Johnson & Johnson (JNJ)? Interested in getting the full scoop on JNJ, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this JNJ stock guide, we'll address key questions about JNJ, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are JNJ earnings?
2. What is JNJ dividend?
3. What is JNJ dividend yield?
4. What is JNJ stock forecast (i.e., prediction)?
5. JNJ buy or sell? What is JNJ Finny Score?
6. What are the reasons to buy JNJ? Why should I buy JNJ stock?
7. What are the reasons to sell JNJ? Why should I sell JNJ stock?
8. What are JNJ key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are JNJ earnings?

JNJ trailing 12-month earnings per share (EPS) is $5.68.

2. What is JNJ dividend?

JNJ forward dividend is $4.04.

3. What is JNJ dividend yield?

JNJ forward dividend yield is 2.63%.

Analyst Predictions

4. What is JNJ stock forecast (i.e., prediction)?

Based on JNJ analyst price targets, JNJ stock forecast is $165.06 (for a year from now). That means the average analyst price target for JNJ stock is $165.06. The prediction is based on 23 analyst estimates.

The low price target for JNJ is $142.00, while the high price target is $180.00.

JNJ analyst rating is Buy.


5. JNJ buy or sell? What is JNJ Finny Score?

#{finnyScore:67}Our quantitative analysis shows 4 reasons to buy and 2 reasons to sell JNJ, resulting in Finny Score of 67.

6. What are the reasons to buy JNJ? Why should I buy JNJ stock?

Here are the reasons to buy JNJ stock:

  • The majority of J&J's near-term patent losses are for products that are hard to make, including the biologic drug Remicade, which should slow generic competition.
  • Diverse healthcare segments insulate J&J from downturns in the economy, offering a defensive growth opportunity with a stable and likely growing dividend.
  • Several of Johnson & Johnson's key drugs and pipeline drugs are specialty drugs that tend to carry stronger pricing power and lower regulatory hurdles for approval.
  • Johnson & Johnson struck several deals, which should boost its top line. The Cougar Biotechnology acquisition allowed Johnson & Johnson to strengthen its oncology portfolio especially in the areas of advanced prostate cancer, breast cancer and multiple myeloma. The acquisition has proved its worth with the approval of prostate cancer therapy, Zytiga.
  • Johnson & Johnson continues to work on strengthening its Pharma segment, which has been driving revenues over the past few quarters. Johnson & Johnson expects to launch or file for approval for more than 10 new blockbuster products by 2021. The company said that each of these products has blockbuster potential.
  • Apart from established products in the pharma segment, new products like Imbruvica, Xarelto and Darzalex are performing well. Zytiga and Imbruvica are notably successful launches in the company’s oncology portfolio. The company is also working on expanding the label of currently marketed products like Simponi, Stelara, Zytiga and Imbruvica.
  • Johnson & Johnson is looking to increase its presence in emerging markets as they hold immense potential. Given the huge potential, the company has set up manufacturing and R&D centers in Brazil, China and India, and has almost doubled its footprint in emerging markets in the last five years. These countries are trying to make healthcare accessible to more people primarily by improving insurance coverage. Johnson & Johnson intends to continue working on strengthening its pipeline in Japan as well as China.
  • J&J has identified a lead vaccine candidate for COVID-19. The company plans to begin production at risk imminently and its goal is to supply more than 1 billion doses of the vaccine globally. J&J looks confident of having the first batch of COVID-19 vaccine available for emergency use authorization, on a not-for-profit basis, by early 2021. It set up a new US vaccine manufacturing facility.
  • JNJ forward dividend yield is 2.63%, higher than the industry (0.78%) and sector (0.16%) forward dividend yields. See JNJ forward dividend chart.
  • JNJ average analyst rating is Buy. See JNJ analyst rating chart.
  • JNJ average analyst price target ($165.06) is above its current price ($147.17). See JNJ price target chart.
  • JNJ cash to debt ratio is 0.63, higher than the average industry (0.15) and sector (0.16) cash to debt ratio. See JNJ cash to debt chart.

7. What are the reasons to sell JNJ? Why should I sell JNJ stock?

Let's look at the reasons to sell JNJ stock (i.e., the bear case):

  • Product recalls and manufacturing issues in the consumer business could dent Johnson & Johnson's powerful brand name in a segment where brand recognition is critical.
  • J&J faces more than 19,000 lawsuits for its talc-based products, like baby powders. The lawsuits allege that its talc products contain asbestos, which caused many women to develop ovarian cancer. In addition, J&J faces more than 10,000 lawsuits alleging that use of its antipsychotic drug, Risperdal causes enlargement of breast tissues in boys.
  • Several J&J's products in the company’s portfolio including Invega and Ortho Tri-Cyclen Lo are facing generic competition. Moreover, biosimilar competition for Remicade, which was once J&J’s largest product, entered several major EU markets.
  • Quite a few products in the company’s portfolio including Invega and Ortho Tri-Cyclen Lo are facing generic competition. Moreover, biosimilar competition for Remicade entered several major EU markets in February 2015.
  • The labels of products like Remicade and Simponi contain warnings regarding the risk of cancer in children and teenagers. The inclusion of such warnings could lead to restricted sales of these products. In Feb 2010, the FDA approved a risk management program (RiskMap) to inform about the risks of erythropoiesis-stimulating agents (ESAs).
  • Johnson & Johnson has suffered its share of pipeline setbacks. These include failure to gain approval for ceftobiprole (the company returned global rights for the candidate to its Swiss partner, Basilea Pharmaceuticals), a third CRL for the supplemental new drug application (sNDA) for Xarelto for acute coronary syndrome (ACS) and the withdrawal of the EU application for an additional indication for Velcade for the treatment of patients with relapsed follicular non-Hodgkin lymphoma. Johnson & Johnson also announced that it no longer intends to seek EU approval for Risperdal Consta for bipolar I disorder.
  • JNJ quarterly revenue growth was -10.80%, lower than the industry and sector average revenue growth (1.76% and 0.83%, respectively). See JNJ revenue growth chart.
  • JNJ profitability is declining. The YoY profit margin change was -21.31 percentage points. See JNJ profitability chart.

Key Stats

8. What are JNJ key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for JNJ:

Metrics JNJ
Price $143.07
Average Price Target / Upside $165.06 / 15.37%
Average Analyst Rating Hold
Forward Dividend Yield 2.72%
Industry Drug Manufacturers - Major
Sector Healthcare
Number of Employees 135,100
Market Cap $389.92B
Forward P/E Ratio 16.42
Price/Book Ratio 4.82
Revenue (TTM) $80.86B
YoY Quarterly Revenue Growth 1.70%
Profit Margin 21.01%

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