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What To Expect From JNJ Stock In 2025?
JNJJ&J(JNJ) Forbes·2025-01-10 16:19

Stock Performance and Market Context - Johnson & Johnson (JNJ) stock lost about 7% in 2024, underperforming the S&P 500 index, which gained 23% for the year [1] - JNJ stock declined from 155inearlyJanuary2024to155 in early January 2024 to 144 by the end of the year [6] - Over the last four years, JNJ stock returns were 11% in 2021, 6% in 2022, -9% in 2023, and -5% in 2024 [6] Business Performance in 2024 - J&J saw an uptick in its medical devices business, driven by recent acquisitions, with electrophysiology and cardiovascular sales trending higher [3] - Market share increased for blockbuster drugs like Darzalex, Erleada, and Tremfya, with Darzalex generating around 3billioninquarterlysales[3]−BiosimilarcompetitionimpactedkeydrugslikeImbruvica,whichsawa73 billion in quarterly sales [3] - Biosimilar competition impacted key drugs like Imbruvica, which saw a 7% year-over-year decline in sales for the first nine months of 2024 [3] Acquisitions and Financial Impact - J&J acquired V-Wave for 1.7 billion, Shockwave Medical for 13.1billion,YellowJerseyfor13.1 billion, Yellow Jersey for 1.25 billion, and Proteologix for 850milliontoexpanditsMedTechandpharmaceuticalbusinesses[4]−Cashpositiondeclinedfrom850 million to expand its MedTech and pharmaceutical businesses [4] - Cash position declined from 23 billion in 2023 to 20billionasofSeptember2024,whileoveralldebtincreasedfrom20 billion as of September 2024, while overall debt increased from 29 billion to 36billion[5]−Thecompanyincreaseditsdividendby4.236 billion [5] - The company increased its dividend by 4.2% to 4.96 in 2024 and spent 2billiononsharerepurchasesinthefirstthreequarters[5]Outlookfor2025−Stelara,atop−sellingdrugwith2 billion on share repurchases in the first three quarters [5] Outlook for 2025 - Stelara, a top-selling drug with 11 billion in annual sales in 2023, faces biosimilar competition in Europe and the U.S., potentially leading to a meaningful decline in sales [8][9] - J&J temporarily paused the use of its heart device Varipulse due to reports of neurovascular events, which was expected to generate over 1billioninannualsales[9]−NewdrugslikeCarvyktiandSpravatoaregainingmarketshare,atrendexpectedtocontinuein2025[10]−PotentialFDAapprovalforNipocalimabandfasttrackdesignationforPosdinemabcouldprovidegrowthopportunities[11]ValuationandPeerComparison−JNJstockisestimatedtohaveavaluationof1 billion in annual sales [9] - New drugs like Carvykti and Spravato are gaining market share, a trend expected to continue in 2025 [10] - Potential FDA approval for Nipocalimab and fast track designation for Posdinemab could provide growth opportunities [11] Valuation and Peer Comparison - JNJ stock is estimated to have a valuation of 172 per share, over 20% above its current levels of $142, based on a 17x forward P/E multiple [7] - The stock is trading at under 14x forward expected earnings, suggesting potential headwinds are largely priced in [12]