Johnson & Johnson Set to Report Q1 Earnings Amid Legal Challenges

Johnson & Johnson (JNJ), based in New Brunswick, New Jersey, is a leading player in the healthcare sector, focusing on research, development, manufacturing, and sales. With a market capitalization of $385.1 billion, JNJ offers a diverse portfolio of pharmaceuticals that address areas including neuroscience, cardiovascular health, metabolism, immunology, oncology, pulmonary hypertension, and infectious diseases, including vaccines. Investors are awaiting the company’s fiscal Q1 earnings announcement, scheduled for April 15 before market opening.

Analysts Forecast a Dip in Earnings

Before the earnings announcement, analysts are predicting that JNJ will report earnings of $2.59 per share. This figure represents a 4.4% decrease from the $2.71 per share reported in the same quarter last year. Notably, the company has outperformed Wall Street’s earnings expectations for the last four consecutive quarters. In the previous quarter, JNJ achieved earnings of $2.04 per share, exceeding consensus estimates by 2%.

Future Profitability Expectations

Looking at the full year, analysts anticipate that JNJ will achieve earnings per share (EPS) of $10.58, marking a 6% increase from the preceding fiscal year’s $9.98. Projections for fiscal 2026 suggest further growth, with EPS expected to rise 4.6% year over year to $11.07.

Stock Performance Analysis

In the past 52 weeks, JNJ’s performance has been in line with the S&P 500 Index’s ($SPX) gains of 3.6%. However, it has outperformed the Health Care Select Sector SPDR Fund (XLV), which has seen a slight decline in the same period.

Legal Challenges Impacting Share Value

On April 1, JNJ’s shares dropped by 7.6% following a Texas bankruptcy judge’s dismissal of the company’s recent attempts to settle numerous lawsuits. These lawsuits claim that JNJ’s baby powder and other talc products are linked to ovarian cancer, presenting significant legal and financial risks for the company.

Recent Quarterly Results and Market Reaction

JNJ’s fourth-quarter results, released on January 22, revealed an adjusted EPS of $2.04 and revenue of $22.5 billion, both surpassing Wall Street’s expectations. The company reported a 5.3% increase in revenue compared to the same quarter last year, driven by stronger sales across its business segments. However, despite these achievements, shares fell by 1.9% on the day of the announcement, largely due to disappointing revenue guidance for fiscal 2025. JNJ forecasted revenue between $89.2 billion and $90 billion, which fell short of analyst predictions. Moreover, the adjusted earnings, although exceeding expectations, showed a 10.9% decline compared to the previous year, further dampening investor sentiment.

Wall Street Analysts’ Ratings

Overall, Wall Street analysts express a moderately optimistic outlook for JNJ’s Stock, assigning a “Moderate Buy” rating. Among 22 analysts, eight recommend a “Strong Buy,” two suggest a “Moderate Buy,” and 12 advocate a “Hold.” The average price target for JNJ stands at $169.18, indicating a possible 5.9% upside from current trading levels.

On the date of publication, Neharika Jain did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data are provided for informational purposes only. Please review the Barchart Disclosure Policy here.

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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.