Market Analysis by covering: Johnson & Johnson. Read 's Market Analysis on Investing.com ...

Core Viewpoint - Johnson & Johnson (J&J) stock declined despite the company forecasting 2026 sales and profit above Wall Street expectations, primarily due to ongoing legal concerns related to talc litigation [1][14]. Sales and Profit Forecast - J&J expects operational sales for 2026 to be between $99.5 billion and $100.5 billion, exceeding analysts' estimates of $98.9 billion [2][15]. - The projected profit for the full year 2026 is between $11.43 and $11.63 per share, compared to analysts' expectations of $11.45 per share [2][15]. Legal and Regulatory Concerns - The sales forecast includes a negative impact of "hundreds of millions of dollars" due to a drug pricing agreement with the Trump administration, where J&J is one of 16 pharmaceutical companies agreeing to lower U.S. drug prices [3][4]. - Concerns regarding talc litigation have resurfaced, with a court-appointed special master recommending expert testimony linking J&J's talc products to ovarian cancer, which has contributed to the stock's decline [6][14]. Financial Performance - J&J reported better-than-expected results for the fourth quarter of 2025, with adjusted earnings of $6 billion, or $2.46 per share, surpassing analysts' expectations of $2.44 [10]. - Quarterly revenue reached $24.56 billion, exceeding forecasts of $24.16 billion, driven by strong sales in the Innovative Medicine division and medical devices [10]. Product Performance and Market Position - The Innovative Medicine division saw a 10% increase in sales to $15.76 billion, while medical devices sales grew by 7.5% to $8.80 billion, both surpassing expectations [10]. - CEO Joaquin Duato described 2025 as a "catapult year," highlighting the strength of the company's portfolio and pipeline, with cancer therapy Carvykti achieving over $1 billion in annual sales for the first time [11]. Challenges and Future Outlook - J&J faces challenges such as tariff uncertainties for its medical devices unit and increased competition for its psoriasis drug Stelara from biosimilars, which has seen a decline in sales [12][13]. - Despite the challenges, the broader portfolio is reportedly growing at a rate of 14% to 15% when excluding Stelara [13].

Core Viewpoint - Johnson & Johnson (JNJ) stock experienced a decline despite the company providing strong guidance for 2026, primarily due to competitive pressures from Boston Scientific (BSX) and Medtronic (MDT) in the electrophysiology sector [1] Company Summary - Johnson & Johnson's electrophysiology business is facing challenges as competitors Boston Scientific and Medtronic continue to undercut its market position [1] - The company has issued strong guidance for 2026, indicating confidence in its future performance despite current stock fluctuations [1] Industry Summary - Electrophysiology tools, which include pulsed field ablation (PFA), are critical for studying heart rhythms and treating conditions like atrial fibrillation [1] - PFA utilizes high-voltage electrical pulses to eliminate problematic heart tissue, thereby restoring normal heart rhythm [1]

Financial Data and Key Metrics Changes - In Q4 2025, worldwide sales reached $24.6 billion, a 7.1% increase despite a 650 basis point headwind from Stelara [20][21] - For the full year 2025, worldwide sales totaled $94.2 billion, reflecting a 5.3% increase, with U.S. growth at 6.9% and 3.4% outside the U.S. [21][22] - Net earnings for Q4 were $5.1 billion, with diluted earnings per share at $2.10, compared to $1.41 a year ago [21] - Full year 2025 adjusted net earnings were $26.2 billion, with adjusted diluted earnings per share at $10.79, an 8.1% increase from 2024 [23][31] Business Line Data and Key Metrics Changes - Innovative Medicine reported Q4 sales of $15.8 billion, a 7.9% increase, with significant contributions from oncology and immunology [24] - In oncology, Darzalex grew 24.1%, while Carvykti achieved sales of $555 million with 63.2% growth [24][25] - Tremfya in immunology saw remarkable growth of 65.4%, with full year sales exceeding $5 billion for the first time [14][25] - MedTech sales reached $8.8 billion in Q4, a 5.8% increase, driven by strong performance in cardiovascular and surgical segments [26][27] Market Data and Key Metrics Changes - In oncology, operational sales grew 21% in 2025, with expectations to exceed $50 billion in annual sales by 2030 [10] - The cardiovascular segment delivered 15% operational sales growth, with Abiomed and Shockwave showing strong performance [16][26] - Vision care saw robust growth, particularly in Surgical Vision, with a 10.8% increase driven by new product innovations [27] Company Strategy and Development Direction - The company plans to separate its Orthopaedics business to focus on high-growth areas [7] - Investments of over $32 billion in R&D and M&A in 2025, including acquisitions of Intra-Cellular Therapies and Halda Therapeutics, are aimed at accelerating growth [8] - The company aims for double-digit growth by the end of the decade, supported by a diverse portfolio of 28 products generating over $1 billion annually [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving faster growth in 2026 compared to 2025, driven by a strong pipeline and portfolio [8][19] - The company anticipates operational sales growth of 5.7%-6.7% for 2026, with a midpoint of $100 billion [35] - Management highlighted the importance of innovation in driving future growth and improving patient outcomes [43][55] Other Important Information - The company ended 2025 with approximately $20 billion in cash and marketable securities, generating $19.7 billion in free cash flow [34] - The effective tax rate for Q4 2025 was a benefit of 3%, compared to an 11.7% cost in Q4 2024 [30] Q&A Session Summary Question: Overview of growth potential and strategic repositioning - Analyst inquired about the key levers for achieving double-digit growth and the impact of the strategic repositioning away from lower growth segments [47] - Management responded that the strength of the portfolio and pipeline, particularly in oncology and immunology, supports the growth outlook [48][49] Question: MedTech market dynamics and growth expectations - Analyst asked about the MedTech market outlook for 2026 and the expected growth acceleration [58] - Management indicated confidence in growth despite potential policy changes, emphasizing strong clinical demand and strategic focus on higher growth markets [59][60] Question: Margin progression and relationship to top-line growth - Analyst sought clarification on margin progression in relation to expected top-line growth [68] - Management explained that margin improvements are expected to align with sales growth, particularly following the orthopedic separation [70][71] Question: Vision Care market health and performance - Analyst requested insights on the Vision Care market and performance discrepancies between regions [73] - Management highlighted strong underlying performance in the contact lens category and ongoing focus on vision as a growth area [74]

Financial Data and Key Metrics Changes - In Q4 2025, worldwide sales were $24.6 billion, an increase of 7.1% despite a 650 basis point headwind from Stelara [19] - For the full year 2025, worldwide sales reached $94.2 billion, reflecting a 5.3% increase, with U.S. growth at 6.9% and 3.4% outside the U.S. [20][21] - Net earnings for Q4 were $5.1 billion, with diluted earnings per share at $2.10, compared to $1.41 a year ago [20] - Full year adjusted net earnings were $26.2 billion, with adjusted diluted earnings per share at $10.79, an increase of 8.1% compared to 2024 [21] Business Line Data and Key Metrics Changes - Innovative Medicine sales for Q4 were $15.8 billion, up 7.9%, with significant contributions from oncology and immunology [22] - In oncology, Darzalex grew 24.1%, while Carvykti achieved sales of $555 million with 63.2% growth [22] - Tremfya in immunology saw remarkable growth of 65.4%, while Stelara declined 48.6% due to biosimilar competition [23] - MedTech sales for the year were $34 billion, with operational growth of 5.4%, driven by cardiovascular and surgical segments [15][24] Market Data and Key Metrics Changes - In oncology, operational sales growth was 21% in 2025, with expectations to exceed $50 billion in annual sales by 2030 [10] - The cardiovascular segment delivered 15% operational sales growth, with Abiomed and Shockwave showing strong performance [15][16] - Vision care saw robust growth, particularly in surgical vision, with a 10.8% increase driven by new product innovations [17] Company Strategy and Development Direction - The company plans to separate its orthopedics business to focus on high-growth areas [7] - Investments of over $32 billion in R&D and M&A in 2025, including acquisitions of Intra-Cellular Therapies and HALDA Therapeutics, are aimed at accelerating growth [8] - The company aims for double-digit growth by the end of the decade, supported by a diverse portfolio of 28 products generating over $1 billion annually [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in accelerated growth for 2026, driven by a strong portfolio and pipeline [8][30] - The company anticipates operational sales growth of 5.7%-6.7% for 2026, with a midpoint of $100 billion [32] - Management highlighted the importance of innovation in driving future growth, particularly in oncology and immunology [45][50] Other Important Information - The company ended 2025 with approximately $20 billion in cash and marketable securities, generating $19.7 billion in free cash flow [31] - The effective tax rate for Q4 2025 was a benefit of 3%, compared to an 11.7% cost in Q4 2024 [27] - Adjusted income before tax as a percentage of sales increased from 24.1% to 28.7% [28] Q&A Session Summary Question: Overview of growth prospects and strategic repositioning - Analyst inquired about the key levers for achieving double-digit growth and the impact of the orthopedics separation on the company's strategy [43] - Management responded that the focus on oncology, immunology, and MedTech will drive growth, with a strong pipeline supporting this outlook [44][45] Question: MedTech market dynamics and growth expectations - Analyst asked about the MedTech market outlook for 2026 and the performance of the electrophysiology business [53] - Management indicated confidence in growth despite market dynamics, emphasizing strong clinical demand and successful product launches [54][60] Question: Margin progression and relationship to top-line growth - Analyst sought clarification on margin expansion in relation to expected sales growth [62] - Management noted that margin improvements are expected to align with sales growth, particularly post-orthopedic separation [66] Question: Vision care market health and performance - Analyst requested insights on the vision care segment's performance and market dynamics [69] - Management confirmed strong underlying performance in the contact lens category, with a focus on innovation and growth in vision care [70]

Financial Data and Key Metrics Changes - In Q4 2025, worldwide sales reached $24.6 billion, a 7.1% increase despite a 650 basis point headwind from Stelara [17] - For the full year 2025, worldwide sales were $94.2 billion, reflecting a 5.3% increase, with U.S. growth at 6.9% and international growth at 3.4% [18] - Net earnings for Q4 were $5.1 billion, with diluted earnings per share at $2.10, compared to $1.41 a year ago [18] - Full year 2025 net earnings were $26.8 billion, with diluted earnings per share at $11.03, significantly up from $5.79 the previous year [19] Business Line Data and Key Metrics Changes - Innovative Medicine reported Q4 sales of $15.8 billion, a 7.9% increase, with notable growth in oncology and immunology [20] - In oncology, Darzalex grew 24.1%, while Carvykti achieved sales of $555 million with a growth of 63.2% [20] - Immunology saw Tremfya grow 65.4%, while Stelara declined 48.6% due to biosimilar competition [21] - MedTech sales for the year were $34 billion, with operational growth of 5.4%, driven by cardiovascular and surgical segments [13] Market Data and Key Metrics Changes - U.S. sales growth was 7.5% in Q4, while international sales grew by 6.6% [17] - The cardiovascular segment delivered 15% operational sales growth, with Abiomed and Shockwave showing strong performance [13] - Surgical vision grew 10.8%, driven by new product innovations and demand for premium intraocular lenses [24] Company Strategy and Development Direction - The company plans to separate its orthopedics business by mid-2027, focusing on high-growth areas [30] - Investments of over $32 billion in R&D and M&A were made in 2025, including acquisitions of Intra-Cellular Therapies and HALDA Therapeutics [6] - The company aims for double-digit growth by the end of the decade, supported by a strong portfolio and pipeline [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving faster growth in 2026 compared to 2025, with a line of sight to double-digit growth [6] - The company anticipates operational sales growth in 2026 to be between 5.7% and 6.7%, with a midpoint of $100 billion [31] - Management highlighted the strength of their portfolio and pipeline as key drivers for future growth [41] Other Important Information - The company ended 2025 with approximately $20 billion in cash and marketable securities, and $48 billion in debt [30] - A net interest expense of $300 million to $400 million is expected for 2026 [33] - The effective tax rate is projected to be between 17.5% and 18.5% for 2026 [34] Q&A Session Summary Question: Overview of growth prospects and key levers for double-digit growth - Management highlighted the strength of the portfolio and pipeline, focusing on oncology, immunology, and MedTech as key growth areas [40][41] Question: MedTech market dynamics and growth expectations - Management does not expect the loss of ACA subsidies to materially impact MedTech performance, with a focus on clinical capacity driving growth [48] Question: Margin progression and relationship to top-line growth - Management indicated that margin improvements will align with sales growth, with expectations for at least 50 basis points of improvement in 2026 [55] Question: Vision care market health and performance - Management noted strong underlying demand in the contact lens category, with robust growth driven by new product launches [58][59]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Core Insights - The U.S. biotech industry is increasingly dependent on China, which has become a critical player in drug development and innovation [4][5][18] - China's role has evolved from contract research and manufacturing to significant contributions in novel drug discovery and licensing [17][19] Industry Overview - Major biotech hubs in the U.S. include Boston, San Francisco, and San Diego, while China has developed significant life-science clusters in cities like Shanghai and Beijing [3] - Zhangjiang Science City in Shanghai hosts over 1,700 biomedical companies, including major global pharmaceutical firms [3] Financial Landscape - The average cost for a big pharma company to develop a drug in 2024 is $2.23 billion, while biotech startups require a median investment of $304.1 million to develop FDA-approved biologics [5][6] - U.S. biotech funding has declined, with only 8.3% of venture funding going to biotech in 2025, the lowest in over 20 years [6][7] Research and Development - China conducted nearly one-third of the world's clinical trials in 2024, benefiting from lower operational costs and a unified data system [13][15] - The National Medical Products Administration (NMPA) has significantly increased its capacity, clearing a backlog of drug applications much faster than the FDA [15] Licensing and Innovation - In 2024, the value of drugs licensed from China to the West reached $48 billion, a 15-fold increase since 2020, with Chinese firms accounting for nearly a third of large licensing deals [18][19] - The share of global licensing deals from Chinese companies increased from 5% in 2019 to 48% in 2025, while U.S. companies' share dropped from 55% to 29% [18] Regulatory Environment - The U.S. government has enacted the BIOSECURE Act, restricting federal agencies from purchasing biotech products from certain companies, signaling a shift in the regulatory landscape [21][24] - The Act reflects the growing perception of biotechnology as a matter of national security, potentially altering the dynamics of U.S.-China biotech relations [24]

th January 21, 2026 Cautionary note on Forward-looking statements This presentation contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, and market position and business strategy. The viewer is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate ...

Market Overview - Futures have reversed modest overnight gains, with S&P futures down 0.1% and Nasdaq futures down 0.3% as small caps outperform for a record 12th day in a row [1] - The market mood remains shaky, with a significant drop in liquidity as top of book collapsed 60% overnight [4] - Gold continues to hit new highs, approaching $4,900 per ounce, while bond yields are 1-2 basis points lower [1][8] Corporate News - Biohaven (BHVN) rises 3% after an upgrade to outperform by RBC due to supportive data [5] - Halliburton (HAL) climbs 2% after reporting fourth-quarter adjusted earnings per share that beat analyst estimates [5] - Kraft Heinz (KHC) declines 5% as Berkshire Hathaway may sell some or all of its stake in the company [5] - Nathan's Famous (NATH) rises 8% after Smithfield Foods agreed to buy the company for $102 per share [5] - Netflix (NFLX) falls 7% after forecasting first-quarter earnings below analyst estimates and pausing share buybacks [5] Economic Indicators - The US economic calendar includes October construction spending and December pending home sales, with expectations of a 0.1% increase and a 0.25% decrease respectively [18][38] - Inflation in the UK rose to 3.4% in December, slightly above expectations, driven by higher tobacco prices and airfares [27] Geopolitical Developments - President Trump's speech at the World Economic Forum is anticipated to address various topics, including trade and tariffs, amid ongoing tensions regarding Greenland [6][30] - The Supreme Court is set to hear arguments regarding Trump's ability to fire Federal Reserve Governor Lisa Cook, coinciding with a criminal investigation into Fed Chair Jerome Powell [11][25] Sector Performance - European stocks drifted lower, with the Stoxx 600 down 0.6%, weighed down by financials and tech, while materials and luxury names outperformed [13][26] - The Russell 2000 is outperforming the Magnificent Seven by more than 10% year-to-date, indicating a rotation in market leadership [9]