J&J(US:JNJ) ZACKS·2025-08-25 13:41Core Insights - Johnson & Johnson's stock has been performing well, trading above its 50-day and 200-day simple moving averages since mid-June, achieving a golden cross in mid-July after strong Q2 2025 results and raised guidance [1][8]. Group 1: Business Model and Performance - Johnson & Johnson's diversified business model is a significant strength, operating in both medical devices and pharmaceuticals, with over 275 subsidiaries [6][7]. - The Innovative Medicine unit is showing growth, with a 2.4% increase in sales in the first half of 2025, and expected sales of over $57 billion in 2025 [9][10]. - The MedTech segment saw a 6.1% increase in sales in Q2 2025, driven by new acquisitions and product launches [12]. Group 2: Challenges and Headwinds - The company faces challenges from the loss of patent exclusivity for Stelara, which generated $10.36 billion in sales in 2024, leading to a 38.6% decline in sales in the first half of 2025 due to biosimilar competition [14][15]. - Sales in China are negatively impacted by the volume-based procurement program, which is expected to continue affecting sales in 2025 [13]. - Legal issues related to talc-based products and potential tariffs on pharmaceutical imports pose additional uncertainties for the company [17][20]. Group 3: Financial Outlook and Estimates - Johnson & Johnson's stock has outperformed the industry with a 26.0% increase year-to-date compared to a 1.6% increase for the industry [22]. - The Zacks Consensus Estimate for 2025 earnings has risen from $10.60 to $10.86 per share over the past 60 days, indicating positive sentiment [29]. - The company anticipates operational sales growth in both the Innovative Medicine and MedTech segments to be higher in the second half of 2025, with expectations for accelerated growth from 2026 onward [30][31].