Johnson & Johnson Faces Mixed Performance Amid Sales Guidance Issues

Johnson & Johnson reports better-than-expected Q4 EPS but stock dips due to disappointing 2025 revenue guidance. Analysts maintain a 'Moderate Buy' rating.

Date: 01-03-2025

AI Rating: 5

Earnings Per Share (EPS)
Johnson & Johnson reported an adjusted EPS of $2.04 for Q4 2024, surpassing expectations. This positive EPS performance could indicate strong profitability in the short term.

Revenue Growth
The company's revenue for Q4 was reported at $22.5 billion, which is aligned with its historical performance, yet the guidance for 2025 projected revenue between $89.2 billion and $90 billion fell short of market expectations. Such guidance may lead investors to reconsider their positions due to anticipated slower growth.

Market Performance
Despite these issues, JNJ's shares have risen 5.1% over the last three months, outperforming the Dow Jones Industrials Average's decline, indicative of some investor confidence in the short term. However, they remain down 1.9% following the earnings report, suggesting that the market reacted negatively to the lowered expectations on future sales.

Long-Term Trends
Although JNJ has a 12.9% increase year-to-date, lagging behind the broader market performance is concerning. With a strong focus on R&D and a diverse business model, JNJ does hold potential for future growth if it can navigate the challenges in its MedTech segment, particularly in China.

Analyst Sentiment
Despite recent underperformance, analysts maintain a cautious optimism for JNJ with a ‘Moderate Buy’ rating and a mean price target of $169.09, suggesting room for growth if the company can achieve its projected revenues and improve sales in troubled segments. Nevertheless, competition, particularly from Eli Lilly, illustrates a challenging landscape ahead.

Stocks: JNJ LLY