To The Moon

$Johnson & Johnson(JNJ)$ is scheduled to report fourth-quarter earnings on 22 Jan (Wednesday) before market open, analysts expect sales and profits to grow year-over-year.

JNJ's stock trended lower in the final months of 2024, but analysts anticipate it could rise in the coming months. Johnson & Johnson faces several challenges entering the new year, including risks to its credit rating and unresolved class action lawsuits.

Johnson & Johnson's (JNJ) Q4 earnings and revenue estimates were nudged higher before results on Wednesday, BofA Securities said Friday in a report.

The estimate for per-share earnings is at $2.01 with revenue forecast at $22.61 billion, up from $22.52 billion, the report said.

Johnson & Johnson (JNJ) Price Target

Based on 11 Wall Street analysts offering 12 month price targets for Johnson & Johnson in the last 3 months. The average price target is $169.00 with a high forecast of $185.00 and a low forecast of $160.00. The average price target represents a 14.94% change from the last price of $147.03.

BofA said the focus of the Q4 earnings call will likely include an indication of the impact of the acquisition of Intra-Cellular Therapies (ITCI), along with currency fluctuations seen as a "material headwind to reported sales and EPS." BofA cut the price target on Johnson & Johnson to $160 from $166 and reiterated its neutral rating.

Johnson & Johnson (JNJ) Last Earnings Call Sentiment Neutral

JNJ has a -8,28% change since its last earnings call on 15 Oct 2024, this has given a neutral sentiment to the earnings call.

Johnson & Johnson reported robust sales growth and pipeline advancements in Q3 2024, particularly in Innovative Medicine and MedTech segments. However, earnings were impacted by legal settlement costs and challenges in the Asia Pacific region. Despite these challenges, the company remains confident in its growth trajectory.

Johnson & Johnson delivered 6.3% operational sales growth in Q3 2024, with notable strength in Innovative Medicine and MedTech segments.

Innovative Medicine reported over $14 billion in sales for the second consecutive quarter, with 11 key brands growing double digits. DARZALEX reached $3 billion in sales in a single quarter.

MedTech sales increased by 6.4%, driven by acquisitions such as Shockwave and Abiomed, leading to double-digit growth in the Cardiovascular segment.

Significant pipeline progress with five major U.S. and EU approvals, including RYBREVANT for lung cancer and TREMFYA for ulcerative colitis.

Year-to-date free cash flow was approximately $14 billion compared to $12 billion last year. JNJ's free cash flow for Q3 2024 was $7.01B. For the 2024 fiscal year, JNJ's free cash flow was decreased by $878.00M and operating cash flow was $7.99B. See a summary of the company’s cash flow.

Johnson & Johnson (JNJ) Company Guidance

During Johnson & Johnson's Q3 2024 earnings call, the company provided updated guidance highlighting strong operational sales growth and adjusted operational EPS expectations.

Johnson & Johnson increased their adjusted operational sales growth guidance to a range of 5.7% to 6.2%, with a midpoint of 6%, driven by robust performance in both their Innovative Medicine and MedTech segments.

The company reported a 6.3% operational sales increase in Q3, with worldwide sales reaching $22.5 billion. They also raised their full-year operational sales growth target to 6.3% to 6.8%, reflecting confidence in their strategic acquisitions and pipeline advancements.

Despite facing headwinds in the Asia Pacific region, particularly in China, and the impact of the talc litigation settlement proposal, Johnson & Johnson adjusted their operational EPS guidance to $9.91, maintaining a positive outlook for 2025 and beyond.

HeadWinds and Litigation Impact Might Continue To Haunt JNJ

The last quarterly results were impacted by a $1.75 billion charge related to the talc litigation settlement proposal. This might be increase as there is report in November that JNJ would pay more than $9 billion to resolve talc claims as part of a proposed bankruptcy settlement, according to new data.

The increased in expenses due to acquired IPR&D have the adjusted diluted earnings per share decreased by 9% compared to Q3 2023. We might see some more adjustment in Q4 2024.

MedTech faced headwinds in the Asia Pacific region, particularly in China, affecting growth forecasts for the remainder of the year. STELARA sales declined by 5.7%, impacted by unfavorable net patient mix and share loss.

Technical Analysis - Multi-timeframe

If we were to look at JNJ, it is currently trading below the 200-day period, and this could signal weakness in this stock.

Though we are seeing MACD making upside movement, but MTF is showing downward trend for most of the period, and a surprise earnings plus strong guidance for 2025 might help to push JNJ into a bullish reversal.

Summary

I think JNJ could still need to manage the expenses from the headwinds and talc litigation as they have also increase talc ad spending after their $9 billion settlement offer.

I would monitor this stock but might not take a long term position maybe for short-term trade.

Appreciate if you could share your thoughts in the comment section whether you think JNJ would provide an earnings surprise.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.