Why Is Johnson & Johnson (JNJ) Up 13% Since Last Earnings Report?

A month has gone by since the last earnings report for Johnson & Johnson (JNJ). Shares have added about 13% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Johnson & Johnson due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Johnson & Johnson before we dive into how investors and analysts have reacted as of late.

Q4 Earnings & Sales Beat Estimates

J&J’s fourth-quarter 2025 earnings came in at $2.46 per share, which beat the Zacks Consensus Estimate of $2.43. Earnings rose 20.6% from the year-ago period. Adjusted earnings included a cost of 10 cents related to the acquisition of Halda Therapeutics, which was closed in the fourth quarter.

Adjusted earnings exclude intangible amortization expense and special items. Including these items, reported earnings were $2.10 per share, up 48.9% year over year.

Sales were $24.56 billion, which also beat the Zacks Consensus Estimate of $24.12 billion.

Sales rose 9.1% from the year-ago quarter, reflecting an operational increase of 7.1% and a positive currency impact of 2.0%. Organically, excluding the impact of acquisitions/divestitures and currency, sales rose 6.1% on an operational basis.

The Stelara loss of exclusivity (“LOE”) hurt revenue growth by 650 basis points in the quarter.

Fourth-quarter sales in the domestic market rose 7.5% to $14.2 billion. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, domestic sales rose 5.7% in the quarter.

International sales rose 11.3% on a reported basis to $10.4 billion, reflecting an operational increase of 6.6% and a positive currency impact of 4.7%. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, international sales rose 6.8% in the quarter.

Segment Details

Innovative Medicines Segment 

J&J’s Innovative Medicines segment sales rose 10.0% year over year to $15.76 billion, reflecting a 7.9% operational increase and a positive currency impact of 2.1%. Excluding the impact of all acquisitions and divestitures and currency on an adjusted operational basis, worldwide sales rose 6.2%. Innovative Medicines sales beat the Zacks Consensus Estimate of $15.43 billion.

Higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains drove the segment’s growth. Sales of some other drugs like Xarelto, Simponi/Simponi Aria, Uptravi and Opsumit also rose in the quarter. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato contributed significantly to growth. The sales growth was partially dampened by lower sales of Imbruvica and generic/biosimilar competition to drugs like Stelara. 

Stelara’s LOE negatively impacted the Innovative Medicines segment’s growth by 1110 basis points in 2025. 

In the Innovative Medicines segment, sales in the United States rose 7.9%, while outside U.S. sales also rose 7.9% on an operational basis.

Oncology 

Darzalex sales rose 26.6% year over year to $3.9 billion in the quarter, driven by continued share gains across all lines of therapy, particularly the front-line setting, as well as inventory dynamics and market growth. Sales beat the Zacks Consensus Estimate of $3.74 billion. 

Imbruvica sales declined 6.5% to $684.0 million. Rising competitive pressure in the United States due to new oral competition has been hurting Imbruvica's sales for the past few quarters. Imbruvica sales were, however, better than the Zacks Consensus Estimate of $670 million.

Erleada generated sales of $959.0 million in the quarter, up 22.4% year over year, driven by share gains and market growth, partially offset by the impact of Part D redesign. Erleada sales beat the Zacks Consensus Estimate of $936.0 million.

New drug Carvykti recorded sales of $555.0 million, up 65.8% year over year, driven by share gains and continued capacity expansion. Another new drug, Tecvayli, recorded sales of $176.0 million in the quarter, up 20.8% year over year.

Sales of Talvey were $149.0 million, up 75.8% year over year. Tecvayli and Talvey’s growth was driven by continued expansion into the community setting. 

Rybrevant/Lazcluze sales were $216.0 million compared with $198.0 million in the previous quarter, driven by continued launch uptake in all regions.

Zytiga sales declined 11.9% to $119.0 million in the quarter due to generic competition. 

Immunology

Stelara sales declined 47.7% to $1.23 billion in the quarter due to the impact of biosimilar competition and Part D redesign. While U.S. sales of Stelara declined 54.9%, international sales declined 28.8% in the quarter. Stelara sales missed the Zacks Consensus Estimate of $1.36 billion.

Tremfya recorded sales of $1.59 billion in the quarter, up 67.6% year over year, driven by share gains across all indications, particularly the IBD indications and strong market growth. Tremfya sales beat the Zacks Consensus Estimate of $1.36 billion.

Simponi/Simponi Aria sales rose 8.4% to $632.0 million. Sales of Remicade rose 3.2% in the quarter to $370.0 million. 

Neuroscience, PH and Other Drugs

In neuroscience, Spravato recorded sales of $503.0 million, up 69.0% year over year, driven by strong demand trends. Caplyta, added from last year’s acquisition of Intra-Cellular Therapies, recorded sales of $249 million in the quarter compared with $240.0 million in the previous quarter. Since U.S. approval for the MDD indication in November 2025, J&J said that Caplyta has seen its highest ever new patient start volumes across all indications.

Invega Sustenna/Xeplion/Invega Trinza/Trevicta sales declined 7.3% to $986.0 million in the quarter.

Pulmonary hypertension (PH) drug Uptravi recorded sales of $491.0 million, up 5.7% year over year. Another PH drug, Opsumit, recorded sales of $643.0 million, up 12.7% year over year. 

Xarelto sales rose 1.7% in the quarter to $687.0 million. Prezista sales declined 5.8% to $383.0 million.  

MedTech Segment

MedTech segment sales came in at $8.8 billion, up 7.5% from the year-ago period, including an operational increase of 5.8% and a positive currency impact of 1.7%. MedTech segment sales beat the Zacks Consensus Estimate of $8.71 billion.

Excluding the impact of all acquisitions and divestitures, and currency, on an adjusted operational basis, worldwide sales rose 5.9%, driven by strong performance in Cardiovascular, Surgery and Vision. 

In the MedTech segment, sales rose 6.6% in the United States and 4.9% outside of the United States on an operational basis. 

The MedTech business has improved in the past three quarters, driven by strong performance in three focus areas: Cardiovascular, Surgery and Vision. 

However, the company continues to face headwinds in China. Sales in China are being hurt by the impact of the VBP program. 

Cardiovascular (previously Interventional Solutions) sales grew 11.5% to $2.3 billion, driven by strong growth in electrophysiology and higher sales of Abiomed and Shockwave. The electrophysiology business has improved significantly, driven by procedure growth and increased Varipulse ablation catheter adoption and utilization, partially offset by competitive pressures in PFA.

Worldwide Surgery rose 5.5% to $2.6 billion as growth in wound closure and biosurgery offset the impact of competitive pressure in energy and endocutters and VBP issues in China. Worldwide orthopedics rose 5.3% to $2.44 billion, driven by new product launches, partially offset by the Orthopaedics transformation and the impact of VBP in China. Worldwide Vision rose 8.9% to $1.42 billion, driven primarily by contact lenses as well as double-digit growth in Surgical Vision.

As regards the potential separation of its Orthopaedics franchise into a standalone orthopedics-focused company, called DePuy Synthes, J&J expects a transaction by mid-2027.

2025 Results

Full-year 2025 sales rose 6.0% to $94.2 billion, beating the Zacks Consensus Estimate of $93.73 billion. Sales were slightly ahead of the guidance range of $93.5 billion-$93.9 billion. 

Adjusted earnings for 2025 were $10.79 per share, up 8.1% year over year. Earnings missed the Zacks Consensus Estimate of $10.83 per share. Earnings also slightly fell short of the guidance range of $10.80-$10.90 per share.

Issues 2026 Guidance

J&J expects sales in the range of $100.0 billion-$101.0 billion in 2026. The sales projection indicates growth in the range of 6.2%-7.2%. Operational sales growth is expected in the range of 5.7%-6.7%. In 2026, revenues are expected to benefit as the year includes a 53rd week.

Adjusted operational sales (excluding currency impact, acquisitions/divestitures) growth is expected in the range of 5.4%-6.4%.

J&J expects fairly consistent operational sales growth throughout the year with a higher fourth quarter due to the benefit from the 53rd week.

Adjusted earnings per share are expected to be in the range of $11.43-$11.63. On an operational, constant-currency basis, adjusted earnings per share are expected to increase in the range of 5.9%-7.9%.

J&J expects higher earnings per share growth in the second half of the year versus the first half.

Adjusted pretax operating margin is expected to improve by approximately 50 basis points due to MedTech tariff costs and also costs related to the drug pricing deal with the U.S. government. 

In 2026, J&J expects MedTech tariff costs of approximately $500 million, which is significantly above the 2025 amount. 

The company now projects net interest expense to be between $300 million and $400 million. Adjusted tax rate is expected to be approximately 17.5% to 18.5%.

J&J expects accelerated growth in both the Innovative Medicine and MedTech segments in 2026.

In 2026, J&J expects accelerated growth in the Innovative Medicine segment despite the loss of exclusivity of Stelara. The growth is expected to be driven by its key products, such as Darzalex, Tremfya, Spravato, Carvykti and Erleada as well as new launches like Rybrevant plus Lazcluze in non-small cell lung cancer and Caplyta in MDD. 

J&J expects a more pronounced impact from new products in 2026 than 2025. Other than Stelara LOE impact, J&J expects generic impact for both Simponi and Opsumit to begin in 2026.

In the MedTech segment, J&J expects better growth than 2025 levels, driven by increased adoption of newly launched products across Cardiovascular, Surgery and Vision portfolios. It also expects some additional rounds of VBP impact in China in 2026. 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

At this time, Johnson & Johnson has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Johnson & Johnson has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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

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