Should You Buy, Sell or Hold J&J Stock Ahead of Q4 Earnings?

Earnings and Estimates - The Zacks Consensus Estimate for JNJ Q4 sales and earnings is $22.5 billion and$2.01 per share, respectively [1] - The Zacks Consensus Estimate for JNJ's 2024 earnings has risen from $9.93 to$9.95 per share, while the 2025 estimate has declined from $10.54 to$10.50 per share over the past 60 days [2] - JNJ has exceeded earnings expectations in each of the trailing four quarters, with an average four-quarter earnings surprise of 4.15% [5][6] Stock Performance - JNJ stock has declined 9.5% in the past year, compared to a 5.4% decrease for the industry [1][17] - The stock has underperformed the sector and the S&P 500 [17] - JNJ shares currently trade at 13.95 forward earnings, lower than the industry's 15.29 and the stock's 5-year mean of 16.02 [19] Innovative Medicines Segment - Sales are expected to be driven by key products such as Darzalex, Tremfya, and Erleada [8] - The Zacks Consensus Estimate for Darzalex sales is $3.04 billion, while the model estimate is$3.06 billion [8] - The Zacks Consensus Estimate for Tremfya sales is $1.06 billion, while the model estimate is$1.09 billion [8] - The Zacks Consensus Estimate for Erleada sales is $793.8 million, while the model projects$805.0 million [9] - New drugs like Carvykti, Tecvayli, Talvey, and Spravato are likely to have contributed to top-line growth [9] MedTech Segment - Sales in the Asia Pacific region, specifically China, were hurt by the volume-based procurement program and anti-corruption campaign [13] - JNJ does not expect improvement in the Asia Pacific region in Q4 2024, but new product uptake and commercial execution are expected to boost growth in other markets [14] - The Zacks Consensus Estimate for the MedTech segment is $8.28 billion, while the model estimate is$8.23 billion [14] Acquisitions and Pipeline - JNJ completed acquisitions of Shockwave and V-Wave in MedTech, and Ambrx, Proteologix, and NM26 bispecific antibody in Innovative Medicine [23] - JNJ announced a definitive agreement to acquire Intra-Cellular Therapies for $14.6 billion, adding Caplyta and other CNS candidates to its pipeline [24] Challenges - Sales of key drug Stelara declined in Q3 2024 due to unfavorable patient mix and share loss in Europe [10] - Several biosimilar versions of Stelara are expected to be launched in the US in 2025 [11] - Imbruvica sales are likely to have declined due to rising competitive pressure in the US [12] - JNJ faces more than 62,000 lawsuits related to its talc-based products [25] Outlook - JNJ's outlook for 2025 looks positive, with growth expected in the Innovative Medicine segment driven by key products and new drugs [26] - In MedTech, operational sales growth is expected to be at the upper end of the 5-7% long-term guided range, driven by new product launches and acquisitions [26]