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New Brunswick, New Jersey-based Johnson & Johnson (JNJ), researches, develops, manufactures, and sells various healthcare products for the consumer, pharmaceutical, and medical devices and diagnostics markets. With a market cap of $362.3 billion, the company sells products such as skin and hair care products, acetaminophen products, pharmaceuticals, diagnostic equipment, and surgical equipment.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and JNJ definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the general drug manufacturers industry. The healthcare giant’s focus on high-quality, safe products has earned it a strong reputation among consumers and healthcare professionals. The company's investment in R&D leads to innovative pharmaceuticals and medical devices, keeping it at the forefront of the industry. JNJ's commitment to excellence allows it to penetrate new markets, maintain premium pricing, and stay ahead of market trends.
Despite its notable strength, JNJ slipped 11.4% from its 52-week high of $168.85, achieved on Sep. 4. Over the past three months, JNJ stock declined 9.4%, significantly underperforming the Nasdaq Composite’s ($NASX)15% gains during the same time frame.
In the longer term, shares of JNJ dipped 4.6% on a YTD basis and 5.7% over the past 52 weeks, underperforming NASX’s YTD gains of 31.2% and solid 38.4% returns over the last year.
However, JNJ has traded below its 50-day moving average since late October. The stock has been trading below its 200-day moving average since early November, with slight fluctuations.
JNJ's recent underperformance can be attributed to lower-than-expected sales in the MedTech segment, particularly in the Asia-Pacific region, including China. Additionally, the impending patent expiration of the popular drug Stelara and the legal expenses from ongoing talc product lawsuits are putting pressure on the company's financials. With Stelara being one of the drugs selected for a price cut under the U.S. government's drug price negotiation program, sales are expected to be further impacted starting in 2026.
On Oct. 15, JNJ shares closed up more than 1% after reporting its Q3 results. Its adjusted EPS of $2.42 beat Wall Street expectations of $2.22. The company’s revenue was $22.5 billion, surpassing Wall Street forecasts of $22.2 billion. JNJ expects full-year adjusted EPS to be between $9.88 and $9.98, and expects revenue in the range of $88.4 billion to $88.8 billion.
In the competitive arena of general drug manufacturers, Eli Lilly and Company (LLY) has taken the lead over JNJ, showing resilience with a 41.6% uptick on a YTD basis and solid 40.4% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on JNJ’s prospects. The stock has a consensus “Moderate Buy” rating from the 21 analysts covering it, and the mean price target of $175.95 suggests a potential upside of 17.7% from current price levels.
