Johnson & Johnson: Defensive Strength, Disciplined Growth, and Long-Term Value

Core Viewpoint - Johnson & Johnson is positioned as a defensive healthcare leader with a focus on pharmaceuticals and medical devices, following the Kenvue spin-off, which enhances its growth potential and stability in cash flows and dividends [1][2]. Financial Performance - In Q4 2025, Johnson & Johnson reported a revenue increase of 9.1% year-over-year to $24.56 billion, with net earnings rising to $5.12 billion, driven by strong demand in oncology and immunology treatments [3]. - Earnings per share were reported at $2.10 and adjusted at $2.46, indicating healthy underlying momentum [3]. Dividend and Financial Strength - The company is recognized for its strong dividend history, earning "Dividend King" status, with a dividend yield of approximately 2.3–2.5% and a stable return on equity near 32% [4]. - Johnson & Johnson maintains a conservatively positioned balance sheet, with predictable cash flows supporting R&D, shareholder payouts, and selective buybacks [4]. Technical Analysis - The stock is in a defined uptrend, trading above the 20- and 50-period exponential moving averages, with momentum indicators suggesting ongoing upside pressure [5]. - Current trading price is near 217.39, with resistance levels at 223.46, 229.99, and 237.71, while support is at 214.15, with potential deeper losses if broken [6]. Growth and Long-Term Value - The investment case is based on stability and quality, with solid revenue growth from innovation in oncology and immunology, supported by strong free cash flow and commitment to dividends [7]. - Management's guidance for 2026 is above market expectations, reinforcing confidence in the company's outlook [7]. - Challenges include declines in older products due to patent expirations and external pressures such as pricing and regulatory costs [8].