Company Overview - Johnson & Johnson (JNJ) is a global healthcare conglomerate with a market cap of $455 billion, headquartered in New Brunswick, New Jersey, and founded in 1886. The company operates in innovative prescription medicines, advanced surgical and medical technologies, and legacy consumer brands [1]. Performance Metrics - JNJ has outperformed the broader market in 2025, with stock gains of 30.6% year-to-date and 17.6% over the past 52 weeks, compared to the S&P 500 Index's gains of 16.3% and 17.7% respectively [2]. - In the healthcare sector, JNJ has also outperformed the Health Care Select Sector SPDR Fund (XLV), which has risen 4.9% in 2025 and experienced a 2.6% decline over the past 52 weeks [3]. Financial Results - For Q3 2025, JNJ reported a revenue growth of 6.8% year-over-year to $24 billion and an adjusted EPS increase of 16% to $2.80, indicating solid growth in both top and bottom lines. The company raised its full-year 2025 revenue guidance midpoint to approximately $93.2 billion while maintaining its adjusted EPS guidance at around $10.85 [4]. - Analysts project an adjusted EPS of $10.86 for fiscal 2025, reflecting an 8.8% year-over-year increase, with JNJ having exceeded Wall Street's earnings expectations in each of the last four quarters [5]. Analyst Ratings - The stock has a consensus "Moderate Buy" rating, with 25 analysts covering it, including 13 "Strong Buys," two "Moderate Buys," and 10 "Holds" [5]. - A month ago, the configuration was slightly less bullish, with 11 analysts giving "Strong Buy" recommendations. J.P. Morgan analyst Chris Schott reiterated a "Hold" rating on JNJ with a price target of $205 [6]. - The mean price target for JNJ is $202.35, indicating a modest 7.1% upside potential, while the highest target of $225 suggests a notable 19.1% premium to current price levels [6].

Core Viewpoint - UnitedHealth's shares fell over 4% following allegations of secret payments to nursing homes to reduce hospital transfers, which have raised concerns about the company's practices and overall health [1][4]. Group 1: Allegations and Impact - The Guardian reported that UnitedHealth made secret payments to nursing homes, which saved the company millions but potentially jeopardized residents' health [1][4]. - These allegations are part of a series of negative events for UnitedHealth, including a significant cyberattack, investigations into Medicare fraud, and the recent departure of CEO Andrew Witty [2][4]. Group 2: Stock Performance - UnitedHealth's shares have declined over 39% this year, contrasting with a mere 0.6% decrease in the Dow [4]. - HSBC downgraded UnitedHealth's stock from "hold" to "reduce" and set a price target of $270, citing concerns over rising medical costs and potential Medicaid funding cuts [6]. Group 3: Leadership Changes - Stephen Hemsley has returned as CEO to navigate the company through its current challenges, with expectations that his experience will help restore credibility [6][8]. - Analysts believe Hemsley possesses the necessary leadership attributes to stabilize the company [7].

Core Viewpoint - The S&P 500 has entered correction territory, dropping 10.1% from its all-time high, presenting potential investment opportunities in quality stocks during this downturn [1][2]. Group 1: Market Overview - The S&P 500 index, consisting of 500 influential U.S. companies, has seen a decline of 10.1% since its peak on February 19 [1]. - Current market pressures are attributed to uncertainties surrounding President Trump's tariff policies and the historically high valuations of the stock market [2]. - Historically, corrections in the S&P 500 are viewed as ideal opportunities for long-term investors, with major indexes expected to rise over a 20-year horizon [3]. Group 2: Investment Opportunities NextEra Energy - NextEra Energy is highlighted as a strong investment choice, being the largest electric utility in the U.S. by market cap [5]. - The company benefits from consistent demand for electricity and operates in a monopolistic environment, ensuring stable cash flow [6][7]. - Approximately 50% of NextEra's 72 gigawatts of capacity comes from renewable energy, contributing to a 10% compound annual earnings growth rate over the past decade [8]. - The forward P/E ratio of NextEra Energy is 18, which is a 26% discount compared to its average over the last five years [9]. Johnson & Johnson - Johnson & Johnson is recommended as a defensive stock, having grown its adjusted operating earnings for 35 consecutive years prior to the pandemic [10]. - The company has shifted focus towards novel-drug development, maintaining high margins and strong pricing power [12]. - Johnson & Johnson's shares are available at less than 15 times forecast earnings for 2026, which is 8% below its five-year average [14]. AutoZone - AutoZone is positioned well as the average age of vehicles on U.S. roads has increased to 12.6 years, leading to higher demand for auto parts [16]. - The company is expanding its network with approximately 200 mega hubs to improve accessibility for customers [17]. - AutoZone has executed a significant share repurchase program, retiring approximately 16.75 million shares for $37.8 billion, reducing its outstanding share count by 89% [18]. Alphabet - Alphabet is identified as a cost-effective investment, with shares trading for less than 16 times forecast earnings for 2026, which is 30% below its trailing five-year multiple [24]. - The company derives 75% of its net sales from advertising, maintaining a dominant position in internet search with a 90% market share [22]. - Google Cloud is recognized as a key long-term growth driver, with the integration of AI solutions expected to enhance cash flow from this segment [23].

Core Viewpoint - The article highlights two Dow Jones Industrial Average stocks, Johnson & Johnson and UnitedHealth Group, as strong investment opportunities, while Boeing is identified as a stock to avoid due to ongoing challenges and self-inflicted issues. Group 1: Johnson & Johnson - Johnson & Johnson is characterized as a low-volatility stock, with shares being less than half as volatile as the S&P 500 [3] - The company has a consistent demand for its healthcare products, leading to predictable cash flow, regardless of economic conditions [4] - A strategic shift towards brand-name drug development has resulted in innovative medicine accounting for nearly two-thirds of net sales [5] - Johnson & Johnson has achieved 35 consecutive years of adjusted operating earnings growth prior to the COVID-19 pandemic, showcasing its sustainable growth [6] - The company has had only 10 CEOs in its 139-year history, contributing to stability in leadership and growth initiatives [7] - Johnson & Johnson's forward price-to-earnings (P/E) ratio is below 15, and it has increased its quarterly dividend for 62 consecutive years, resulting in a 3% yield [8] Group 2: UnitedHealth Group - UnitedHealth Group is another healthcare stock recommended for purchase, despite a 24% decline from its all-time high [9] - The decline is attributed to a Department of Justice investigation, the death of a key executive, and a cybersecurity attack affecting millions [9] - The company has denied allegations regarding its Medicare Advantage insurance operations, indicating strong premium pricing power in the healthcare insurance sector [10] - UnitedHealth's Optum subsidiary is a significant growth driver, providing various healthcare services and growing sales faster than the traditional insurance segment [11] - The demand for healthcare services remains consistent, making UnitedHealth's business model resilient to economic fluctuations [12] - The company's shares are trading at a forward P/E multiple of 14, representing a 28% discount to its five-year average [13] Group 3: Boeing - Boeing is identified as a stock to avoid due to significant challenges, including a 60% decline from its all-time high and ongoing production issues [14][15] - The company has reported net losses totaling $35.7 billion over six consecutive years, primarily due to self-inflicted mechanical and delivery issues [16] - Boeing's balance sheet is concerning, having issued $18.2 billion in common stock to strengthen its financial position amid production challenges [17] - The Federal Reserve Bank of Atlanta's GDPNow forecast predicts a 2.8% contraction in U.S. GDP, historically correlating with poor performance for Boeing during recessions [18] - Investors are advised to adopt a wait-and-see approach regarding Boeing's recovery from its production issues and balance sheet concerns [19]