Johnson & Johnson Faces Challenges Despite Strong Q1 Results
Johnson & Johnson (JNJ), with a market cap of $372.9 billion, stands as a major player in the global healthcare sector. The company operates across pharmaceuticals, medical technologies, and consumer health products, utilizing one of the industry’s most substantial R&D budgets to drive innovation and deliver diverse therapeutic solutions.
Recent Market Performance
Despite its significant market presence, JNJ has lagged over the past year. The company’s shares have risen 3.8% in the last 52 weeks, while the S&P 500 Index ($SPX) has increased 10.2%. However, JNJ shows resilience with a 7.2% growth year-to-date, outperforming the S&P 500, which has declined by 3.9%.
Additionally, JNJ has outperformed the Health Care Select Sector SPDR Fund (XLV), which recorded a 1.9% decrease during the same period.
Q1 2025 Earnings and Future Outlook
In its recent earnings report for Q1 2025, JNJ announced an adjusted EPS of $2.77 and revenue of $21.9 billion, both exceeding analyst expectations. However, shares experienced a slight dip on April 15 due to a 33.7% decline in Stelara sales year-over-year. Compounding this issue, the company has adjusted its full-year adjusted EPS forecast to a range of $10.50 – $10.70, largely because of dilution from the Intra-Cellular Therapies acquisition and costs associated with new U.S. import tariffs.
Looking ahead, analysts anticipate that JNJ’s adjusted EPS will grow by 6.2% year-over-year, reaching $10.60 for the fiscal year ending December 2025. Notably, JNJ has a strong track record, having surpassed consensus estimates for earnings in the last four quarters.
Analyst Ratings and Price Target Adjustments
Among the 23 analysts who cover JNJ, the consensus rating is a “Moderate Buy,” supported by 10 “Strong Buy” ratings, two “Moderate Buys,” and 11 “Holds.” This represents a more favorable outlook than three months ago, which had only eight “Strong Buy” ratings.
On April 16, Morgan Stanley raised JNJ’s price target to $169 while maintaining an “Equal Weight” rating after a strong Q1 performance and updated revenue guidance for 2025. The firm acknowledged that new product cycles are helping mitigate Stelara’s diminishing sales, although tariff impacts on MedTech and unresolved pharmaceutical tariff risks remain a concern.
As of now, JNJ is trading below the average price target of $170.09. The highest price target of $185 suggests a potential upside of 19.4% from current levels.
On the date of publication, Sohini Mondal did not hold any positions in the securities mentioned in this article. All information and data are for informational purposes only. For more details, please refer to the Barchart Disclosure Policy here.
The views expressed herein are solely those of the author and do not necessarily reflect the views of Nasdaq, Inc.
