Core Insights - Johnson & Johnson's (JNJ) MedTech segment accounts for approximately 36% of total revenues and focuses on high-growth markets, particularly in cardiovascular interventions [2][3] MedTech Segment Performance - Sales in the MedTech business have improved over the past two quarters, driven by acquisitions of Abiomed and Shockwave, as well as growth in Surgical Vision and wound closure [4] - The MedTech segment is expected to maintain strong momentum in Cardiovascular, Surgery, and Vision, supported by the adoption of newly launched products [4] Challenges and Strategic Moves - J&J faces challenges in the Chinese market due to the volume-based procurement (VBP) program, which is impacting sales [5] - The company plans to separate its Orthopaedics franchise into a standalone company, DePuy Synthes, to enhance growth and margins [6] Future Outlook - J&J anticipates better growth in the MedTech business by 2026, driven by new product launches and a focus on high-growth markets [7] - The company expects a compound annual growth rate (CAGR) of around 5.4% for the MedTech unit over the next three years [8] Competitive Landscape - J&J's MedTech unit competes with major players like Medtronic, Abbott, Stryker, and Boston Scientific, each specializing in various medical device sectors [9][10] Financial Performance - J&J's shares have outperformed the industry, rising 44.9% over the past year compared to a 21.9% increase in the industry [12] - The company's shares are currently trading at a price/earnings ratio of 18.22, higher than the industry average of 17.56 [14] Earnings Estimates - The Zacks Consensus Estimate for J&J's 2026 earnings has slightly increased from $11.47 to $11.48 over the past 30 days [15]

Core Insights - Johnson & Johnson's (JNJ) MedTech segment, which includes products in orthopedics, surgery, cardiovascular, and vision markets, represents approximately 36% of the company's total revenues [1][11] - In Q3, MedTech sales reached $8.43 billion, reflecting a 5.6% increase on an operational basis [1][11] Sales Performance - The MedTech unit has shown improvement over the last two quarters, primarily due to the acquisitions of cardiovascular businesses, Abiomed and Shockwave, along with advancements in Surgical Vision and wound closure in Surgery [2] - Cardiovascular sales surged by 17.4% in the first nine months of 2025, driven by the strategic acquisitions [3] Strategic Developments - J&J plans to spin off its Orthopaedics franchise into a standalone company named DePuy Synthes, led by industry veteran Namal Nawana [4] - This separation aligns with J&J's strategy to focus on high-growth markets, enhancing growth and margins in the MedTech unit, which has historically been slow-growing [5] Future Outlook - J&J anticipates better growth in the MedTech business in 2026 compared to 2025, fueled by the adoption of new products and a focus on high-growth markets [6] - New product launches, including the Shockwave C2 Aero catheter and Tecnis intraocular lens, are expected to contribute to growth in 2026 [6] Market Challenges - The company faces challenges in China due to the volume-based procurement (VBP) program, which is impacting sales as the program expands [7] Competitive Landscape - J&J's MedTech unit competes with major players like Medtronic, Abbott, Stryker, and Boston Scientific, each with strong positions in various medical device sectors [8][9] Financial Performance - J&J's stock has outperformed the industry, rising 34.1% year-to-date compared to an 8.4% increase in the industry [10] - The company's shares are trading at a price/earnings ratio of 17.02, higher than the industry average of 15.84 [13] Earnings Estimates - The Zacks Consensus Estimate for 2025 earnings remains at $10.86 per share, while the estimate for 2026 has increased from $11.38 to $11.47 [15]