JNJ
HealthcareJohnson & Johnson
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Market Data
Financials
XBRL · SEC EDGAR2007–2025(19yr)| Metric | FY 2007 | FY 2008 | FY 2010 | FY 2011 | FY 2012 | FY 2012 | FY 2013 | FY 2014 | FY 2016 | FY 2017 | FY 2017 | FY 2018 | FY 2019 | FY 2021 | FY 2022 | FY 2023 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $61.1B | $63.7B | $61.9B | $61.6B | $65.0B | $67.2B | $71.3B | $74.3B | $70.1B | $71.9B | $76.5B | $81.6B | $82.1B | $82.6B | $93.8B | $94.9B | $85.2B | $88.8B | $94.2B | +6.0% |
| Gross Profit | $43.3B | $45.2B | $43.5B | $42.8B | $44.7B | $45.6B | $49.0B | $51.6B | $48.5B | $50.2B | $51.1B | $54.5B | $54.5B | $54.2B | $63.9B | $63.9B | $58.6B | $61.4B | $63.9B | +4.2% |
| Gross Margin | 70.9% | 71.0% | 70.2% | 69.5% | 68.7% | 67.8% | 68.7% | 69.4% | 69.3% | 69.8% | 66.8% | 66.8% | 66.4% | 65.6% | 68.2% | 67.3% | 68.8% | 69.1% | 67.9% | -1.2pp |
| Operating Income | — | — | $16.6B | $17.7B | $13.8B | $15.0B | $16.4B | $21.6B | — | — | — | — | — | — | — | — | — | — | — | — |
| Operating Margin | — | — | 26.8% | 28.7% | 21.2% | 22.2% | 23.0% | 29.0% | — | — | — | — | — | — | — | — | — | — | — | — |
| Net Income | $10.6B | $12.9B | $12.3B | $13.3B | $9.7B | $10.9B | $13.8B | $16.3B | $15.4B | $16.5B | $1.3B | $15.3B | $15.1B | $14.7B | $20.9B | $17.9B | $35.2B | $14.1B | $26.8B | +90.6% |
| Net Margin | 17.3% | 20.3% | 19.8% | 21.7% | 14.9% | 16.1% | 19.4% | 22.0% | 22.0% | 23.0% | 1.7% | 18.8% | 18.4% | 17.8% | 22.3% | 18.9% | 41.3% | 15.8% | 28.5% | +12.6pp |
| Free Cash Flow | $12.1B | $11.9B | $14.2B | $14.0B | $11.4B | $12.5B | $13.8B | $14.8B | $15.8B | $15.5B | $17.8B | $18.5B | $19.9B | $20.2B | $19.8B | $17.2B | $18.2B | $19.8B | $19.7B | -0.7% |
| FCF Margin | 19.8% | 18.7% | 23.0% | 22.7% | 17.5% | 18.5% | 19.4% | 19.9% | 22.6% | 21.6% | 23.3% | 22.7% | 24.3% | 24.4% | 21.1% | 18.1% | 21.4% | 22.3% | 20.9% | -1.4pp |
| EPS (Diluted) | $3.63 | $4.57 | $4.40 | $4.78 | $3.49 | $3.86 | $4.81 | $5.70 | $5.48 | $5.93 | $0.47 | $5.61 | $5.63 | $5.51 | $7.81 | $6.73 | $13.72 | $5.79 | $11.03 | +90.5% |
1. THE BIG PICTURE
Johnson & Johnson has successfully narrowed its focus to high-margin human health, but it now faces a valuation paradox: it trades at the highest premium in its peer group despite offering the lowest dividend yield. Johnson & Johnson is betting that "transformational healthcare innovation" in areas like oncology and robotic surgery can outrun the twin pressures of patent expirations and a new U.S. regulatory regime empowered to negotiate drug prices.
2. WHERE THE RISKS HIT HARDEST
Johnson & Johnson’s "integrated innovation" and reliance on patent protection (10-K Item 1) are directly threatened by the "substantial reduction in sales" that occurs the moment exclusivity is lost (Risks). This vulnerability is most acute in the Innovative Medicine segment, where the entry of biosimilars can erase years of R&DR&DResearch & Development — spending on creating new products or technologies investment. Furthermore, Johnson & Johnson’s "global scale," operating in virtually every country, is undermined by a supply chain concentrated in just 63 internal manufacturing facilities. Any localized natural disaster or geopolitical conflict at these hubs could trigger product shortages that "exceed existing accruals" and disrupt the cash flows needed to fund its disciplined capital allocation strategy.
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a company moving faster than its historical averages. While TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth stands at 6.0%, the most recent quarter showed a 9.1% jump (8-K), suggesting that CEO Joaquin Duato’s "catapult year" narrative is backed by actual sales momentum. However, a gap exists between accounting profits and cash efficiency: Johnson & Johnson maintains the second-highest net margin in its peer group at 26.5%, yet it ranks only fourth in Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin at 23.0% (XBRL). This indicates that while the business is highly profitable on paper, it is less efficient at converting those profits into cold cash than peers like Amgen (29.5% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin). The low short interest of 0.9% suggests that despite the talc litigation overhang, market sentiment remains broadly stable.
4. IS IT WORTH IT AT THIS PRICE?
At a Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 19.4x, Johnson & Johnson trades at a 20% premium to the peer median of 16.1x (Peer Benchmarking). This premium appears to be a "quality tax" investors pay for its $92.1 billion revenue base and superior net margins compared to peers like AbbVie (6.9%). According to the (CAPM analysis), the market is pricing in a long-term growth rate of just 1.1%. Given that Johnson & Johnson’s 2026 guidance forecasts a 6.7% increase in sales to a midpoint of $100.5 billion, the current price seems to reflect deep skepticism about Johnson & Johnson's ability to maintain growth past the 2026 regulatory pricing shifts. If long-term growth were to align with broader GDP at 2.5%, the sensitivity analysis suggests a justified multiple of 26.4x, representing significant potential upside if Johnson & Johnson can prove its pipeline is "patent-cliff proof."
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if the OTTAVA Robotic Surgical System fails to receive FDA approval, which would stall the MedTech segment's "game-changing" technology narrative.
- Constructive if the 2026 Medicare price negotiations result in less severe price cuts than the market anticipates, or if talc-related legal settlements are finalized within current accrual levels.
6. BOTTOM LINE
Structural Advantage: A massive, diversified R&DR&DResearch & Development — spending on creating new products or technologies engine that allows Johnson & Johnson to absorb individual patent losses by maintaining 26% net margins across a $92 billion global portfolio. Bottom Line: Johnson & Johnson is a premium-priced defensive play that is currently outgrowing its peers but remains capped by significant legal and regulatory uncertainty.
1. Top 5 Material Risks
- Competitive Pressure and Patent Exclusivity: Johnson & Johnson operates in highly competitive markets where the loss of patent exclusivity for Innovative Medicine products often leads to a substantial reduction in sales as generic and biosimilar competitors enter the market.
- Manufacturing and Supply Chain Interruptions: Johnson & Johnson relies on 63 internal manufacturing facilities and thousands of external suppliers; unanticipated delays—caused by factors ranging from regulatory action to natural disasters—can result in product shortages, sales declines, and significant remediation costs.
- Legal Proceedings and Litigation: Johnson & Johnson is a defendant in numerous lawsuits, including those involving talc-containing body powders, which can result in large settlements or judgments that may exceed current accruals and disrupt results of operations.
- Pricing Pressures and Healthcare Reform: Third-party payors, including government programs like Medicare and Medicaid, are exerting downward pressure on reimbursement rates, while the Inflation Reduction Act of 2022 subjects certain products to government-established pricing starting in 2026.
- Product Reliability and Safety: Concerns regarding product safety or effectiveness can trigger recalls, government investigations, and facility shutdowns, which damage brand equity and lead to declining sales and civil or criminal penalties.
2. Company-Specific Risks
- Planned Orthopaedics Separation: Johnson & Johnson is in the process of separating its Orthopaedics business, a transition that will incur significant expenses and may fail to achieve expected strategic or financial benefits.
- Counterfeit Products: Illegal counterfeiting of Johnson & Johnson products, particularly medicines, poses risks to patient health and can erode patient confidence, leading to lost sales and potential litigation.
- Highly Inflationary Economies: Johnson & Johnson maintains operations in countries such as Argentina, Turkey, Venezuela, and Egypt, where cumulative inflation has surpassed 100%, creating risks of operating losses despite cost-reduction efforts.
- Illegal Importation: The unauthorized importation of lower-priced pharmaceutical products from foreign markets into the U.S. threatens to adversely affect Johnson & Johnson’s sales and profitability.
3. Regulatory/Legal Risks
- Government Investigations: Johnson & Johnson is subject to scrutiny under the Federal Food, Drug, and Cosmetic Act, the Medicaid Rebate Program, and various false claims acts, which carry the risk of significant civil and criminal penalties, including potential debarment from government healthcare programs.
- Anti-Corruption Compliance: Due to extensive international operations and interactions with government-employed healthcare providers, Johnson & Johnson faces strict enforcement under the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act 2010.
- Tax Audits: Johnson & Johnson is subject to global tax audits and disputes; tax authorities may take positions contrary to Johnson & Johnson’s expectations, potentially resulting in tax liabilities that exceed established reserves.
- Data Privacy and Security: Johnson & Johnson must comply with global privacy laws regarding the collection and storage of personal data; breaches or non-compliance can result in substantial fines, class-action lawsuits, and reputational damage.
4. Financial Impact Map
Patent Exclusivity Loss → Net Sales → Substantial reduction in revenue for specific products upon generic/biosimilar entry.
Manufacturing Disruptions → Cost of Goods Sold / Operating Expenses → Significant remediation and related costs associated with addressing product shortages.
Legal Settlements/Judgments → Cash Flows / Net Earnings → Potential payments in excess of accruals; impact is material to the reporting period in which resolution occurs.
Pricing Pressures (IRA/Medicare) → Net Sales → Government-established pricing for certain products beginning in 2026 and potential negative impact on U.S. Innovative Medicine sales.
Foreign Currency Fluctuations → Consolidated Statement of Earnings → Unhedged exposures and translation effects from 43% of sales occurring outside the U.S. impact revenues and expenses.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Jan 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
| 14A | Mar 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
JNJ FY26 Revenue Guidance $100.5B, +6.7% Growth Amid Innovative Medicine Portfolio Expansion
- ▸FY26 revenue guidance $100.5B, representing 6.7% growth at midpoint
- ▸Innovative Medicine operational sales +7.9% in Q4 2025
- ▸Acquired Halda Therapeutics for $3.05B to expand oncology pipeline
- ▸2025 operating cash flow margin 26.7%, operating margin 29.5%
- ▸Expect $0.10–$0.20 EPS dilution in 2026 from Halda integration and pricing costs
JNJ shares rise on strong earnings and raised full-year revenue guidance
- ▸Raised full-year revenue guidance
- ▸Growth driven by Oncology, Immunology, Neuroscience, Cardiovascular, Surgery, and Vision segments
- ▸Key growth products include Carvykti and Rybrevant
- ▸Market capitalization approximately $584.38 billion
- ▸Q4 2025 one-month return -1.73%
JNJ FDA-approved oral psoriasis drug ICOTYDE launches to bolster immunology franchise
- ▸FDA approved ICOTYDE (icotrokinra) for moderate-to-severe plaque psoriasis
- ▸Phase 3 data shows durable skin clearance and safety profile through 52 weeks
- ▸JNJ projects $112.7B revenue and $25.4B earnings by 2029
- ▸US$500M R&D co-funding deal signed with Royalty Pharma for JNJ 4804
- ▸Immunology franchise growth critical to offset STELARA patent and pricing pressures
LXEO reports $246.6M cash position, operational runway extended into 2028
- ▸Cash, cash equivalents, and investments total $246.6 million
- ▸Operational runway extended into 2028
- ▸SUNRISE-FA 2 pivotal trial initiation on track for 1H 2026
- ▸Established research collaboration with Johnson & Johnson for cardiac AAV delivery
- ▸FDA aligned on flexible process validation approach for LX2006 manufacturing
SGP reports positive 12-month Phase 1/2 BIM-IOL trial data, 97% drop-free success
- ▸Phase 1/2 BIM-IOL trial: 97% of participants eliminated IOP-lowering eye drops at 12 months
- ▸BIM-IOL 78-mcg dose achieved 34% mean IOP reduction from baseline
- ▸February 2026 IPO raised $172.5 million in gross proceeds
- ▸Cash and investments sufficient to fund operations through 2028
- ▸Phase 3 BIM-IOL trial enrollment underway; full enrollment expected in 2027
JNJ Phase 1 bladder cancer study shows 89% response rate for erdafitinib treatment
- ▸Phase 1 study evaluated intravesical drug-releasing mechanism with erdafitinib
- ▸89% objective response rate observed in non-muscle-invasive bladder cancer patients
- ▸Targeted patients with specific fibroblast growth factor receptor (FGFR) mutations
- ▸Study focuses on innovative drug-delivery mechanism for bladder cancer treatment
J&J receives FDA approval for Icotyde, oral psoriasis pill targeting $5B peak sales
- ▸FDA approved Icotyde as first oral IL-23 blocking peptide for psoriasis
- ▸Drug targets market currently dominated by injectable therapies like Skyrizi and Tremfya
- ▸Management projects potential peak annual sales exceeding $5 billion
- ▸Represents significant competitive threat to existing injectable biologic treatments
- ▸First-in-class oral treatment option for moderate-to-severe plaque psoriasis
BofA raises Johnson & Johnson price target to $253 from $227
- ▸BofA price target raised to $253 from $227
- ▸Rating maintained at Neutral
- ▸2027 non-GAAP EPS forecast increased by approximately $0.20
- ▸Five-year revenue CAGR projection raised to 4.6% from 4.0%
- ▸Submitted second BLA to FDA for IMAAVY to treat hemolytic anemia