Story Stocks^®

Johnson & Johnson (JNJ) modestly topped Q3 expectations, posting adjusted EPS of $2.80, up 16% yr/yr, on revenue of $23.99 bln, up 6.8%. The company reaffirmed its FY25 adjusted EPS guidance of $10.80-$10.90 and slightly raised its reported sales forecast to $93.5-$93.9 bln from $93.2–$93.6 bln. Separately, JNJ also announced plans to spin off its orthopaedics business as DePuy Synthes, which generated $9.2 bln last year.

• Innovative Medicines grew 5.3% operationally, led by Tremfya (+41%) and strong oncology drugs Darzalex and Carvykti. Stelara sales plunged by 41% due to competition from biosimilars.
• MedTech revenue rose 5.6%, driven by electrophysiology, Cardiovascular devices (Abiomed, Shockwave), wound closure, and Surgical Vision products.
• The plan to separate the orthopaedics division follows the 2023 spin-off of Kenvue (KVUE), continuing J&J’s streamlining strategy and focus on high-growth pharma and MedTech areas.
• The separation is expected to enable higher growth rates and stronger operating margins post-completion.

Briefing.com Analyst Insight:

JNJ’s Q3 results highlight steady performance in pharma and MedTech, with Tremfya, Darzalex, and cardiovascular devices driving growth. While Stelara faced biosimilar pressure, the diversified portfolio offsets these headwinds. The orthopaedics spin-off marks another strategic step in streamlining operations and focusing on high-growth areas. This could unlock value and improve efficiency over time, though short-term execution risk remains. Overall, reaffirmed guidance, resilient growth, and proactive restructuring support confidence in J&J’s earnings trajectory into 2026. Additionally, the company’s focus on innovation and selective portfolio prioritization positions it well to capitalize on evolving healthcare trends and emerging market opportunities.