Is Johnson & Johnson Stock Expensive, Or Is STELARA Hiding The Real Price?

Johnson & Johnson (JNJ) stock has returned about 57% over the past year, against about 17% for the S&P 500. On the earnings it has already banked, that price looks expensive. But those earnings carry STELARA, which is losing share to biosimilar competition. What looks dear on earnings already reported comes down sharply on the earnings analysts expect.

Johnson & Johnson Has Run Hard And Now Looks Expensive

At about $270 a share, Johnson & Johnson trades at about 28.3 times its trailing earnings. That figure sits on adjusted earnings: normalized net income with stock-based compensation added back, meant to sit closer to the basis analysts use in their forecasts than a GAAP figure would, though the two measures are not defined identically. Measured as market value against consensus net income, the multiple on fiscal 2026 earnings is about 24.1 times, and on the earnings expected for 2027 it is about 20.9 times.

But You Are Paying For A Year That Carried STELARA

Those trailing twelve months were not a clean run. STELARA cost Johnson & Johnson about 460 basis points of operational sales growth in the second quarter of 2026. Strip it out and the company grew double digits in that quarter on the same basis, on management’s own account.

The trailing multiple measures today’s price against a period burdened by slowing STELARA revenue. The rest of the portfolio kept growing. Revenue over the trailing twelve months is close to $98 billion, and the company has 28 products and platforms that each sell more than $1 billion a year.

Immunology shows both sides at once. TREMFYA grew 71% in the second quarter of 2026, and it remains the fastest-growing advanced therapy in both Crohn’s disease and ulcerative colitis. STELARA is shrinking under biosimilars in that same segment.

Can Johnson & Johnson Keep Widening Its Margins?

Consensus expects profit to grow faster than revenue between 2026 and 2027, so margin expansion is the assumption inside the forward multiples. Earnings only outrun revenue if margins widen, so margin expansion is the assumption inside the forward multiples.

The operating margin over the last twelve months was 26.8%, against a three-year average of 25.7%. That is a different margin line from the one consensus is assuming, but it has been moving the same way.

Analysts expect about $11.53 a share for 2026—a per-share figure measured on a different share count from the multiples above, so it will not divide directly into the price—just under the outlook management raised alongside its second-quarter 2026 results, $11.60 to $11.75 in adjusted earnings per share.

The 2027 estimate is thin. Five analysts cover it, and their forecasts run from $12.16 to $13.44 a share. The risk sits in MedTech. Management said cardiovascular results fell short of its own standards in the second quarter of 2026. Abiomed fell 2% as physicians grew more selective. Electrophysiology grew 3.1%, held back by competitive pressure.

The forward multiples are conditional, and the condition is specific: the launches keep scaling, cardiovascular steadies, and the margin gain holds. For the rest of the field, look at the stocks marked down furthest against their own forecast earnings.

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