Johnson & Johnson's analyst-derived fair value price target has increased by approximately $5.48 to $185.13. Analysts point to stronger recent biopharma performance, improved confidence in growth following the Stelara expiry, and moderating regulatory concerns as key drivers of the upward revision.
Analyst Commentary
Recent analyst updates reflect a dynamic outlook on Johnson & Johnson, with several upward revisions to price targets and changes in ratings. While optimism surrounds the company's post-Stelara prospects and Pharma segment, analysts are also attuned to ongoing risks. The following summarizes current street perspectives:
Bullish Takeaways- Bullish analysts highlight renewed confidence in Johnson & Johnson's growth trajectory, especially following the Stelara exclusivity loss. There are expectations that the Innovative Medicine business will drive future expansion.
- Multiple upward price target revisions cite the company's resilience, attractive valuation, and lower regulatory overhang as key factors underpinning recent positive sentiment.
- Recent trial initiations and positive data from the Pharma pipeline, including assets targeting ulcerative colitis and Crohn's disease, are viewed as potential catalysts for further upside.
- The company's diversified portfolio, including established brands and newer pipeline assets, is seen as not fully valued by the market. This suggests room for a higher multiple as execution continues.
- Bearish analysts remain cautious regarding uncertainty about future tariff and drug pricing policy developments, which could impact both top and bottom-line projections.
- Despite strong earnings and guidance, some observers continue to point to visibility challenges in the Pharma business related to evolving regulatory conditions and pricing risk.
- Concerns persist over whether the company's implied growth acceleration for the coming periods can be consistently sustained against a competitive and changing backdrop.
What's in the News
- A Los Angeles jury awarded $966 million against Johnson & Johnson in the largest talcum powder verdict to date, related to claims of mesothelioma from product use (Law.com).
- The Trump administration outlined a plan for the third round of Medicare drug price negotiations, impacting Johnson & Johnson and industry peers. New pricing rules will apply to up to 15 drugs by 2028 (Bloomberg).
- Bristol Myers, Takeda, Astex, and Johnson & Johnson are joining a consortium to share experimental data for development of an AI tool in drug discovery and development (Reuters).
- Johnson & Johnson is withdrawing its Linx Reflux Management System from markets outside the U.S. due to commercial reasons, reducing available treatment options for reflux disease abroad (Bloomberg).
- Robert F. Kennedy Jr. is expected to claim a new autism link to Tylenol use during pregnancy in an upcoming report, drawing attention because Tylenol was previously owned by a Johnson & Johnson spinout. J&J shares dropped on the news (Wall Street Journal).
Valuation Changes
- Consensus Analyst Price Target: Increased from $179.64 to $185.13, reflecting a rise of approximately $5.49.
- Discount Rate: Remained unchanged at 6.78%.
- Revenue Growth: Projected revenue growth has risen slightly, moving from 4.81% to 4.85%.
- Net Profit Margin: Marginally decreased from 23.05% to 23.02%.
- Future P/E: The expected future price-to-earnings ratio has increased from 21.91x to 22.58x.
Have other thoughts on Johnson & Johnson?
Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.
Create NarrativeDisclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.