Healthcare giant Johnson & Johnson (JNJ) is set to report its Q3 earnings next week. This has some investors wondering whether it would be a good decision to buy shares of JNJ stock beforehand.
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What Wall Street Expects
Wall Street is expecting JNJ to report Q3 earnings per share of $2.77, which would be an increase of 14.5% year-over-year. Its revenues are projected to reach $23.74 billion, up 5.6% from the same quarter last year.
Will JNJ be able to beat these estimates? As one can see below, it has a very good track record of doing just that.
Key Issues Ahead of Earnings
In Q2, the company reported a robust operational sales growth of 4.6%, with worldwide sales reaching $23.7 billion. The innovative medicines segment achieved $15.2 billion in sales, marking a 3.8% increase, with MedTech reporting a 6.1% growth, driven by cardiovascular and surgical vision.
Johnson & Johnson also raised its full-year sales guidance by $2 billion and EPS guidance by $0.25.
RBC Capital analyst Shagun Singh recently raised his price target on Johnson & Johnson to $209 from $185 and kept an Outperform rating on the shares as part of a broader research note on MedTech ahead of Q3 results. He said sentiment for JNJ is positive given improving fundamentals such as Innovative Medicine upside and improving MedTech trajectory.
Wells Fargo analyst Larry Biegelsen raised his price target from $170 to $212. He calculated that based on Johnson & Johnson’s expected earnings over the next twelve months, JNJ stock is trading at a 30% discount compared to the benchmark index, the S&P 500.
Biegelsen also pointed to the recent discount arrangement between rival Pfizer (PFE) and President Trump as an indication that U.S. government tariff pressure may soften.
Is JNJ a Good Stock to Buy Now?
On TipRanks, JNJ has a Moderate Buy consensus based on 11 Buy and 7 Hold ratings. Its highest price target is $213. JNJ stock’s consensus price target is $192.24, implying a 0.67% upside.
