How Did JNJ Fare In Q1?

Johnson & Johnson (NYSE: JNJ) recently reported its Q1 results, with revenues and earnings exceeding the street estimates. The company reported strong adjusted earnings of $2.77 per share on revenue of $21.9 billion, surpassing analysts’ expectations of $2.59 per share and $21.6 billion in revenue. This impressive outperformance was primarily driven by robust sales growth in key drugs such as Darzalex, Tremfya, and Erleada, fueled by increased market share. However, as anticipated, Stelara sales experienced a substantial year-over-year decline of 34%, reaching $1.6 billion, amid biosimilar competition. Consistent with the prior-year quarter, J&J’s adjusted net margins remained a little under 31%.

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What’s Next For J&J?

Looking ahead, the company increased its sales outlook from a previous range of $89.2 billion to $90.0 billion to a new range of $91.0 billion to $91.8 billion. Meanwhile, it maintained its adjusted EPS forecast at $10.50 to $10.70, which accounts for $400 million in tariff costs, dilution from the Intra-Cellular Therapies acquisition, and foreign exchange impacts.

Following its earnings announcement, JNJ stock experienced minimal movement, closing 0.5% lower at $154 on Tuesday, April 15th. However, despite a tariff-related sell-off in broader markets, the stock remains up 7% year-to-date. This suggests investors have been seeking defensive plays amid the current economic uncertainty. Now, we estimate Johnson & Johnson’s Valuation to be $174 per share, over 10% above its current levels of $154. Our forecast is based on 16x forward adjusted expected earnings of $10.60 per share, aligning with the stock’s average P/E multiple over the last five years.

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