Johnson & Johnson
JNJ Mega CapHealthcare · Drug Manufacturers - General
Updated: May 20, 2026, 22:09 UTC
Key Metrics
Valuation Analysis
About the Company
Johnson & Johnson, together with its subsidiaries, engages in the research and development, manufacture, and sale of a range of products in the healthcare field worldwide. It operates in two segments, Innovative Medicine and MedTech. The Innovative Medicine segment offers products for various therapeutic areas, such as oncology, immunology, neuroscience, pulmonary hypertension, infectious diseases, and cardiovascular and metabolism distributed through retailers, wholesalers, distributors, hospitals, and healthcare professionals for prescription use. The MedTech segment provides a portfolio of products used in the surgery, orthopedic, cardiovascular, and vision fields distributed through wholesalers, hospitals and retailers, and used in the professional fields by physicians, nurses, hospita
Johnson & Johnson Stock at a Glance
Johnson & Johnson (JNJ) is currently trading at $229.29 with a market capitalization of $552B. The trailing P/E ratio stands at 26.57x, with a forward P/E of 18.04x. The 52-week range spans from $149.04 to $251.71; the current price is 8.9% below the yearly high. Year-over-year revenue growth stands at +9.9%. The net profit margin stands at 21.83%.
💰 Dividend
Johnson & Johnson pays an annual dividend of $5.36 per share, representing a yield of 2.34%. The payout ratio stands at 60.25%.
📊 Analyst Rating
24 analysts rate Johnson & Johnson (JNJ) on consensus: Buy. The average price target is $252.96, implying +10.32% from the current price. Analyst price targets range from $155.00 to $285.00.
Investment Thesis: Strengths & Weaknesses
- Profitable with 21.83% net margin
- High return on equity (26.42% ROE)
- High gross margin of 68.04% — indicates pricing power
- Analyst consensus: Buy
- Solid dividend yield of 2.34%
- Positive free cash flow
No significant red flags in current metrics.
Technical Snapshot
Price shows short-term weakness (below 50d MA) but is still in a longer-term uptrend (above 200d MA).
Risk Profile
The data points to relatively defensive market behavior.
Trading Data
💵 Dividend Info
Related Stocks in the Same Sector
Johnson & Johnson 2026: Talc Litigation Behind, Stelara Cliff Halfway Through — $533B at Forward P/E 17.4
The Real Story
Johnson & Johnson closed May 12, 2026 at $221.41 — within 12% of its all-time high of $251. The $533B market cap places JNJ as the 4th-largest US healthcare company behind Eli Lilly, UnitedHealth, and Pfizer (depending on the day). The 2026 thesis is dual relief: the talc-litigation overhang that compressed the multiple from 18× to 14× in 2022–2024 has finally resolved with the $9B prepackaged-bankruptcy plan approved in October 2025, and the Stelara biosimilar cliff (which was modeled to compress Pharma revenue by $4B per year) is now halfway through with Stelara-equivalent biosimilars taking only ~38% share versus the 65% model assumption.
Q1/2026 confirmed the recovery thesis. Total revenue: $22.6B (+9.9% YoY, accelerating from Q4/2025's +4.3%). The MedTech segment grew 13% (Abiomed cardiology, robotics, vision care all double-digit). Pharma grew 7.4% despite Stelara biosimilars finally entering — driven by Darzalex (+18%), Tremfya (+24%), and Erleada (+27%). Total Pharma revenue 2026 guidance: $58–$60B (vs. $54B 2025), and management raised Tremfya 2027 peak revenue guidance to $13B+ (from $10B).
The capital structure cleanup is also meaningful. JNJ spun out Kenvue (consumer health) in 2023, completed talc settlement in 2025, and returned $14B to shareholders in 2025 between dividend and buyback. The June 2026 dividend hike (announced April) raised the quarterly payout to $1.34 — the 63rd consecutive annual increase, the longest streak in the S&P 500. JNJ remains the dividend-aristocrat of dividend aristocrats.
What Smart Money Thinks
Johnson & Johnson's institutional ownership is dominated by long-duration capital and dividend-focused active funds. Berkshire Hathaway briefly held a position in 2017–2019 (sold completely by Q4/2019), so the current absence is not a directional read. T. Rowe Price, Capital Group, and Wellington each hold 1.5%+ positions, all stable through the 2022–2024 talc-overhang period. The notable Q1/2026 buyer: GIC Singapore added 4.2M shares ($930M), citing 'restoration of the long-term JNJ thesis post-talc.'
The pharma-specialty fund community is mixed on JNJ. Specialty pharma hedge funds (RA Capital, Baker Bros.) hold zero JNJ — they view JNJ as too diversified to capture pure-play biotech alpha. Generalist hedge funds with healthcare overweights (Viking Global, ValueAct) hold modest positions. The 13F community is therefore concentrated in income-focused active and passive index funds.
Insider activity (Form 4): CEO Joaquin Duato sold 60,000 shares in February 2026 at $215 average (10b5-1 routine). CFO Joseph Wolk sold 22,000 shares. No insider buys in 24 months. The notable absence: Alex Gorsky (former CEO, retired 2022) still holds his original ~280,000 shares — has never sold despite the 2022–2024 talc-overhang weakness. The signal from Gorsky's retention is the closest thing to insider conviction the data offers.
Explore the BMI Smart-Money Tracker →
📈 The 3 Real Bull Points
The October 2025 approval of JNJ's $9B prepackaged bankruptcy plan (LTL Management) ended the talc-litigation overhang that had compressed the forward P/E from ~18× to ~14× over 2022–2024. The plan caps total talc liability at $9B vs. earlier worst-case scenarios of $30B+. With the overhang removed, the multiple has scope to rerate 200–300 bps over the next 18 months — implying $245–$260/share equity value if revenue and margins simply maintain current trajectory.
Stelara (US$11B 2024 revenue) faced biosimilar competition starting February 2025. The Street modeled 65% biosimilar share capture by end-2026 (implying $7B revenue loss). Actual Q1/2026: Stelara revenue down 32% YoY (vs. -55% modeled), meaning biosimilar share is closer to 38%. The slower-than-modeled biosimilar penetration is structural — PBM tier-placement and provider-stickiness gave Stelara more pricing-power retention than expected. Each 10 percentage points of share retention is worth ~$1.1B in revenue.
The April 2026 dividend hike to $1.34 quarterly marked the 63rd consecutive annual increase — JNJ has raised the dividend every year since 1963. The current yield of 2.4% is meaningfully above the S&P 500's 1.4%, and the 5-year dividend CAGR of 5.6% provides inflation-plus growth. Combined with the ~3.5% buyback yield (JNJ repurchased $13B in 2025), total capital return runs at 5.9% — a baseline floor that no earnings volatility can compromise.
📉 The 3 Real Bear Points
JNJ's Q1/2026 GAAP earnings showed -52.9% YoY EPS — a frightening number on the surface. The actual operational EPS (excluding $3.1B talc settlement charge and divestiture losses) was +6.4%. The accounting transition through 2026 will continue to produce GAAP volatility. Investors who look only at headline GAAP will see what appears to be a deteriorating business when the operational story is actually improving. Communication risk is high — and any quarter with non-cash charges can compress the stock.
The Inflation Reduction Act's Medicare drug-price negotiation rules cover 10 drugs in 2026, expanding to 15 in 2027 and 20 in 2028. JNJ's Stelara was on the 2026 list (final negotiated price 20% below list). The 2027 list — to be announced February 2026 — could include Xarelto, Imbruvica, Tremfya, or Darzalex. Each negotiation cycle compresses 8–12% of drug-segment gross profit. JNJ's $58B Pharma segment is the most exposed of any single big pharma — yet the stock price does not appear to differentiate this risk versus less-Medicare-exposed peers.
JNJ MedTech revenue grew 13% in Q1/2026 — but the segment market grew 16%. Stryker took 2 points of orthopedic share, Intuitive Surgical took 4 points in surgical robotics, Medtronic took 1 point in cardiology. JNJ's Abiomed acquisition (cardiology) is performing well, but the structural reality is JNJ MedTech is losing market share in 3 of its 5 sub-segments. If the share-loss trajectory continues, MedTech becomes a slower growth-contributor than the consensus model assumes.
Valuation in Context
Johnson & Johnson trades at a forward P/E of 17.4, EV/EBITDA of 13.4, and P/B of 6.9 as of May 2026. Comparable big-pharma peers — Pfizer (forward P/E 11.2, EV/EBITDA 9.1), Merck (forward P/E 12.4), AbbVie (forward P/E 12.5) — show JNJ at a premium reflecting its diversified MedTech + Pharma structure and the dividend-aristocrat positioning. Wall Street median price target $252.42 (14% upside), with dispersion from $215 (Bernstein, IRA-negotiation bear) to $295 (Wells Fargo, multiple-recovery bull). Sum-of-the-parts: Pharma at $135/share (12× $58B revenue at 20% margin), MedTech at $75/share (3.5× $32B revenue), net cash + non-core at $20/share — total $230/share, slightly above current. The 2.4% dividend + 3.5% buyback yield (5.9% combined) is the baseline floor; multiple recovery to 19–20× is the upside scenario.
🗓️ Next 3 Catalyst Dates
- July 17, 2026: Q2/2026 earnings — Stelara biosimilar erosion update and Tremfya growth trajectory are the key prints
- February 2027: CMS Medicare negotiation 2027 drug list announcement — JNJ exposure clarifies
- Mid-2027: Caplyta (Intra-Cellular Therapies acquisition) launch in major-depressive-disorder — could add $3B+ peak revenue
💬 Daniel's Take
Johnson & Johnson at $221 is the kind of position I add to during sector weakness — it is not exciting, it will not double in three years, but it provides a reliable 9%+ annual total return at low risk. The talc-overhang resolution is the most important multiple-rerating catalyst, and the Stelara-cliff coming in milder than modeled is the operational tailwind. JNJ is the most diversified large-cap healthcare position you can hold — Pharma + MedTech + dividend reliability — and the 2.4% dividend with 63-year increase streak is unique. My add-trigger is below $200 (forward P/E sub-16×) which would happen on either an IRA-negotiation surprise or broader-market correction. For income-focused retirement-account allocations, JNJ remains a 4–6% position — boring is good, and JNJ is the prototype of boring-good.
Sources (3)
Disclaimer: This article is not investment advice. Investing in stocks carries risks, including total loss.
Where can I buy Johnson & Johnson?
Compare top-rated brokers — low fees, trusted providers, fully regulated.