AnalystConsensusTarget updated the narrative for JNJ

Analysts have raised their fair value price target for Johnson & Johnson from approximately $185.13 to $198.03. They cite robust quarterly results, upcoming product launches, and anticipated growth and margin improvements from the company's business transformation initiatives as key reasons for the adjustment.

Analyst Commentary

Wall Street analysts have provided updated perspectives on Johnson & Johnson following recent company developments and quarterly results. Their commentary offers insight into both the drivers of valuation upside and factors that could temper investor enthusiasm.

• Bullish analysts highlight strong Q3 results and the company’s raised guidance for 2025 adjusted operational sales growth. This supports increased price targets and a favorable outlook on execution.
• There is consensus that the upcoming separation of the orthopedics division is transforming Johnson & Johnson into a higher-margin, faster-growing enterprise. This move is seen as having potential for notable revenue and margin improvement.
• Analysts believe that the company’s robust pipeline and new indications for core products position it well for a new phase of growth, even as it contends with near-term challenges such as loss of exclusivity on key drugs.
• Improvements in MedTech fundamentals, progress on litigation issues, and strong performance of Innovative Medicine are viewed as enhancing the company’s defensive qualities and medium-term growth prospects.

• Some bearish analysts caution about ongoing legal headwinds, particularly related to international talc litigation, which could affect long-term sentiment and valuation.
• Despite upward price target revisions, there is concern that raised guidance may be incremental rather than transformational, and that certain core operating segments face competitive pressure.
• Uncertainties around regulatory and political actions, including potential impacts from drug pricing policies, continue to be cited as sources of risk that could weigh on execution and future earnings multiples.

What's in the News

• Johnson & Johnson (J&J) is reportedly in talks to acquire Protagonist Therapeutics, which would strengthen its partnership around an oral immune disease treatment. The deal value is expected to exceed $4 billion (Wall Street Journal).
• The company faces its first lawsuits in the UK over talc cancer allegations. About 3,000 people have filed claims, with J&J referring liability for non-U.S. and Canada claims to Kenvue (Reuters).
• The Trump administration is preparing a new probe into U.S. pharma prices. The investigation will examine whether international trading partners are underpaying for drugs compared to the U.S., with J&J among the drugmakers in focus (Financial Times).
• A Los Angeles jury awarded $966 million in a talc verdict against J&J to the family of a woman who died of mesothelioma, setting a record for such cases (Law.com).
• Bristol Myers, Takeda, Astex, and J&J are joining a consortium to share data for training an AI tool to assist with drug discovery and development (Reuters).

Valuation Changes

• Consensus Analyst Price Target has increased from $185.13 to $198.03. This reflects a higher fair value assessment following recent positive developments.
• Revenue Growth expectations have risen slightly, moving from 4.85% to 5.08% annualized.
• Net Profit Margin is projected to improve modestly, up from 23.02% to 23.44%.
• Future P/E multiple has advanced from 22.58x to 23.97x, indicating a higher valuation outlook based on estimated earnings.
• Discount Rate remained unchanged at 6.78%.