Johnson & Johnson Q2 Outlook: Steady Growth Amid Challenges with a Hold Rating

Analyst Chris Shibutani from Goldman Sachs maintained a Hold rating on Johnson & Johnson (JNJ – Research Report) and keeping the price target at $160.00.

Chris Shibutani’s rating is based on a thorough analysis of Johnson & Johnson’s expected performance and market conditions. Shibutani anticipates that Johnson & Johnson’s second quarter results for 2024 will be consistent with both Goldman Sachs’ expectations and the wider market consensus. He also predicts that the company will likely reaffirm its full-year 2024 guidance. Positive developments have been noted in Johnson & Johnson’s product pipeline, such as the promising results of Tremfya and advancements in their Oncology division, which Shibutani views as a reinforcement of the company’s robust portfolio. Additionally, the medical technology sector is projected to show steady progress, particularly in cardiology-related areas, a trend that may not be fully recognized by the consensus yet.

Despite these positive aspects, Shibutani identifies upcoming challenges that justify the Hold rating. He points out that the introduction of biosimilars to Stelara in Europe is a significant negative factor, which is expected to impact revenue growth and margin expansion throughout the remainder of the year and into 2025. Moreover, while the resolution of the talc litigation remains uncertain, Shibutani notes there might be a possible path to address this issue, which has been a long-standing concern for investors. Overall, incremental updates to the company’s product portfolio based on prescription trends and competitive data have been factored into the Neutral rating, with a price target of $160.

In another report released yesterday, Wells Fargo also maintained a Hold rating on the stock with a $163.00 price target.

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Johnson & Johnson (JNJ) Company Description:

Johnson & Johnson provides healthcare products across three segments: Consumer, Pharmaceutical, and Medical Devices. The Consumer segment includes products used in the baby care, oral care, beauty, over-the-counter pharmaceutical, women’s health, and wound care markets. The Pharmaceutical segment focuses on therapeutic areas such as immunology, infectious diseases ad vaccines, neuroscience, oncology, cardiovascular and metabolism, and pulmonary hypertension. The Medical Devices segment offers products used in the orthopedic, surgery, cardiovascular, diabetes care, and eye health fields. The company was founded by Robert Wood Johnson I, James Wood Johnson and Edward Mead Johnson Sr. in 1886 and is headquartered in New Brunswick, NJ.