VALUATION HIGHLIGHTS

1. Pharmaceuticals constitute 78% of the Trefis price estimate for Johnson & Johnson's stock.
2. Medical Devices constitute 22% of the Trefis price estimate for Johnson & Johnson's stock.

WHAT HAS CHANGED?

Latest Earnings: Second Quarter Fiscal 2026

Johnson & Johnson reported total revenue of $25.31 billion, representing a 6.6% increase year-over-year, and adjusted diluted earnings per share of $2.90, up 4.7%. Primary growth drivers included a 6.8% operational sales expansion in the Innovative Medicine segment and a 3.6% operational growth bump in MedTech, which helped offset headwinds from patent expirations.

Note: Johnson & Johnson's Q2 FY'26 ended on June 30, 2026.

Full-Year Guidance Raised Across Metrics

Following strong operational results, management increased its full-year 2026 estimated reported sales guidance midpoint to $101.1 billion and bumped its adjusted diluted EPS target midpoint to $11.68, reflecting robust momentum in targeted biologic lines.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Johnson & Johnson's value that present opportunities for upside or downside to the current Trefis price estimate:

Innovative Medicine

• Immunology Biosimilar Competition: The expanding patent cliff for legacy therapies like Stelara, which created an approximate 760 basis points headwind this quarter, introduces potential downside risk to long-term specialty medicine revenue expectations if biosimilar market adoption accelerates faster than forecast.
• Oncology Expansion Support: Steady patient demand for core therapies like Darzalex provides solid underlying revenue predictability, offering moderate valuation upside if clinical profile improvements outpace competing market launches.

For additional details, select a division from the interactive Trefis split for Johnson & Johnson at the top of the page.

BUSINESS SUMMARY

Johnson & Johnson designs, manufactures, and distributes advanced healthcare solutions globally, utilizing its scale across specialty pharmaceutical pipelines and precision medical systems to address specialized therapeutic fields.

SOURCES OF VALUE

The Innovative Medicine unit commands the highest proportion of corporate value due to the strong commercial positioning and recurring revenue profiles of its core biologic franchises.

Leading Precision Oncology Scale

The established clinical adoption of Darzalex builds a durable competitive moat in multiple myeloma therapies, ensuring long-term institutional volume integration within global oncology infrastructure.

High-Barrier Electro-Physiology Equipment

Specialized surgical and cardiovascular platform integrations, anchored by the Shockwave acquisition, cultivate high switching costs among hospital purchasing networks.

KEY TRENDS

Cardiovascular Automation Expansion

Growing institutional integration of precision electrophysiology devices and intravascular lithotripsy workflows is accelerating global demand for automated MedTech capital equipment.

Targeted Biologic R&D Consolidation

Corporate resource deployment is increasingly shifting away from broad legacy product structures toward high-margin, specialized biologics that carry longer clinical runway potentials.