Why Is JNJ Stock Beating Rivals That Grow Faster?
Johnson & Johnson (JNJ) stock has returned 58% over the past twelve months, second best in a group of six health care companies. Its revenue growth ranks only fourth of the six. Three peers grew faster and returned less, Eli Lilly among them. The price is a bet that the rest of the business keeps growing once shrinking STELARA sales stop dragging on the total.
How Did A Mid-Pack Grower Outrun Eli Lilly?
Over the last twelve months Lilly’s revenue grew 49.6%, about six times Johnson & Johnson’s 8.1%. Lilly’s stock still returned 54%, less than Johnson & Johnson’s 58%.
| JNJ | PFE | MRK | LLY | ABBV | MDT | |
|---|---|---|---|---|---|---|
| Market Cap ($ Bil) | 652.9 | 165.4 | 365.0 | 1,035.2 | 467.9 | 117.4 |
| PE Ratio | 31.0 | 38.2 | 115.0 | 38.8 | 74.1 | 22.4 |
| LTM Revenue Growth | 8.1% | -0.2% | 4.6% | 49.6% | 10.4% | 9.8% |
| LTM Operating Margin | 26.8% | 26.7% | 10.5% | 49.7% | 33.9% | 19.0% |
| 12M Stock Return | 58.2% | 22.9% | 88.8% | 53.6% | 22.8% | -0.9% |
The pattern holds across the group. AbbVie and Medtronic also grew faster than Johnson & Johnson, and neither stock returned even half as much. Only Merck returned more, on slower growth.
Johnson & Johnson trades at 31.0 times earnings, against 38.8 times for Lilly. So Lilly costs only about a quarter more for far faster growth. The market is paying for something the trailing revenue does not show.
What Is Hiding Inside That Revenue Growth?
Part of the answer is STELARA, an immunology drug losing share to biosimilars. Its sales fell 55.7% in the second quarter of 2026. Management says that excluding STELARA, company sales grew at a double-digit pace in that quarter. The peer ranking counts twelve months of total revenue with STELARA inside it, so the rally is a bet on the business without it.
Other medicines are growing fast. TREMFYA, an immunology drug used in psoriasis as well as Crohn’s disease and ulcerative colitis, grew sales 71% in the second quarter of 2026. DARZALEX, a multiple myeloma drug and the company’s largest product, grew close to 18% in the quarter. And more than 10,000 patients have begun ICOTYDE, a once-daily psoriasis pill.
MedTech, home to heart devices, surgical tools and ACUVUE contact lenses, grew sales only 3.6% in the second quarter. The CFO called its cardiovascular results below the company’s standards.
Can The New Medicines Outrun A Slower MedTech Arm?
Johnson & Johnson guides 2026 reported sales to a midpoint of $101.1 billion. That would be its first year above $100 billion.
Two things muddy that target. The 2026 calendar includes a 53rd week, which management says adds about 100 basis points of growth. And sales at Abiomed, its heart recovery business, fell 2% in the second quarter as physicians grew more selective after an external clinical trial.
The third-quarter report on October 13th is the next clean check. Management says the extra week lands in the fourth quarter, so that report gets no calendar help. Strong growth there would give the rally a real footing. Before paying up, see how Johnson & Johnson scores against every stock on growth, profitability and valuation.
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