J&J's MedTech Segment Slowing Down: Will its Sales Recover in 2025?

Core Insights - Johnson & Johnson (JNJ) operates in both pharmaceuticals and medical devices, with the MedTech segment contributing approximately 36% of total revenues [1] MedTech Segment Performance - MedTech sales increased by 4.1% on an operational basis in Q1 2025, driven by new product uptake and contributions from acquisitions of Shockwave and Abiomed [2][4] - Sales in the Asia Pacific region, particularly China, are facing challenges due to the volume-based procurement (VBP) program and anticorruption campaigns, which are expected to continue impacting sales through 2025 [3][4] - Despite headwinds, stronger sales are anticipated in the second half of 2025 as the business overcomes tougher comparisons from the first quarter and new products gain traction [5][8] Competitive Landscape - JNJ's MedTech unit faces competition from major players such as Medtronic, Abbott, Stryker, and Boston Scientific, each specializing in various medical technologies [5][6] Stock Performance and Valuation - JNJ's shares have outperformed the industry year-to-date, rising by 7.1% compared to a 0.4% decline in the industry [7] - The company's shares are reasonably priced, trading at a price/earnings ratio of 14.12, lower than the industry average of 14.92 and below its five-year mean of 15.74 [10] Earnings Estimates - The Zacks Consensus Estimate for JNJ's 2025 earnings remains at $10.60 per share, while the estimate for 2026 has slightly decreased from $11.00 to $10.98 [12]