Should You Buy Johnson & Johnson Stock Before July 16th?

Core Viewpoint - Johnson & Johnson is a leading healthcare company with a market cap of approximately $380 billion, known for its stability and dividend growth, making it suitable for risk-averse investors [1] Group 1: Stock Performance - The stock has increased over 8% this year, outperforming the S&P 500, and a strong earnings report could further boost its value [2] - The last earnings report showed sales of $21.9 billion, a growth of over 2%, with nearly 6% growth in the U.S. market, offsetting struggles in the international market [4] Group 2: Tariff Risks and Initiatives - Potential stock movement may depend on any initiatives announced to mitigate tariff risks, as U.S. President Trump has threatened a 200% tariff on imported pharmaceuticals [5] - Johnson & Johnson has estimated a potential $400 million impact from tariffs this year, primarily affecting its medtech business [6] Group 3: Valuation and Growth Opportunities - The stock trades at a price-to-earnings multiple of 17, lower than the S&P 500 average of nearly 25, indicating it may be undervalued [7] - Despite a modest growth rate, the company has growth opportunities, such as the recently approved nasal spray for depression, which could generate $5 billion in annual revenue at peak [10] Group 4: Legal Challenges and Stock Stability - The company faces uncertainty due to the loss of patent protection for its top-selling drug Stelara and ongoing talc lawsuits, which could justify a discount on the stock [11] - Johnson & Johnson is characterized as a low-volatility stock, with an average beta of around 0.40, suggesting limited price movement post-earnings [12] Group 5: Investment Considerations - The stock offers a 3.4% dividend yield and is reasonably priced at 17 times earnings, providing a margin of safety for investors [13] - There is no urgent reason to buy the stock immediately; waiting for the earnings report may be a prudent strategy [13]