J&J's MedTech Unit Sales Improve: Will the Momentum Last?

Johnson & Johnson's JNJ medical devices segment, known as MedTech, offers products in the orthopedics, surgery, cardiovascular and vision markets. The MedTech segment accounts for around 36% of J&J’s total revenues.

In the third quarter, MedTech segment sales came in at $8.43 billion, up 5.6% on an operational basis.

Sales in the MedTech unit have improved in the past two quarters, driven by the acquired cardiovascular businesses, Abiomed and Shockwave, as well as Surgical Vision and wound closure in Surgery. Improvements in J&J’s electrophysiology business also drove the growth.

In the MedTech segment, J&J is successfully shifting its portfolio to high innovation, high growth markets, particularly in Cardiovascular. With the acquisitions of Shockwave in 2024 and Abiomed in 2022, J&J has become a leader in four of the largest and highest-growth cardiovascular intervention MedTech markets. Sales in its Cardiovascular segment rose 17.4% in the first nine months of 2025.

Along with its third-quarter earnings release, J&J announced its intention to separate its Orthopaedics franchise into a standalone orthopedics-focused company. The company is going to be called DePuy Synthes and will be led by Namal Nawana, an industry veteran.

The decision to separate its Orthopaedics unit aligns with J&J’s efforts to shift its MedTech portfolio to high-growth markets. The separation will allow J&J to focus on its six priority areas of Oncology, Immunology, Neuroscience in the Innovative Medicine segment and Cardiovascular, Surgery and Vision in the MedTech unit. Moreover, the separation is expected to improve its MedTech unit’s growth and margins as the Orthopaedics franchise has been a slow-growth business for J&J.

In 2026, J&J expects better growth in the MedTech business than 2025 levels, driven by increased adoption of newly launched products across all MedTech platforms and increased focus on higher-growth markets. J&J expects to launch new products like Shockwave C2 Aero catheter and Tecnis intraocular lens in the United States, as well as regulatory submission for the OTTAVA robotic surgical system in 2026. These new products may also contribute to growth in 2026.

However, the company continues to face headwinds in China. Sales in China are being hurt by the impact of the volume-based procurement (VBP) program, which is a government-driven cost containment effort in China. J&J expects continued impacts from VBP issues in China as the program continues to expand across provinces and products.

J&J’s Key Competitors in the Medical Devices Market

J&J’s MedTech unit faces strong competition from several major players in the medical device industry, like Medtronic MDT, Abbott ABT, Stryker SYK and Boston Scientific.

While Medtronic has a strong presence in cardiovascular, neuroscience and surgical technologies, Stryker is a global leader in medical technology, specializing in innovative solutions across surgical, neurotechnology, orthopedics and spine care. Boston Scientific markets products for cardiovascular, endoscopy, urology and neuromodulation. Abbott is known for its medical device products across cardiovascular, diagnostics and diabetes care. 

JNJ’s Price Performance, Valuation and Estimates

J&J’s shares have outperformed the industry year to date. The stock has risen 34.1% in the year-to-date period compared with an 8.4% increase of the industry.

From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 17.02 forward earnings, higher than 15.84 for the industry. The stock is also trading above its five-year mean of 15.65.

The Zacks Consensus Estimate for 2025 earnings has remained unchanged at $10.86 per share, while that for 2026 has risen from $11.38 to $11.47 over the past 30 days.

J&J has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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