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].