- Company name
- Johnson & Johnson
- Sector
- Pharmaceuticals & medical devices
- About
- Johnson & Johnson is a healthcare company with two segments. Innovative Medicine makes prescription medicines for immunology, cancer, neuroscience, heart and lung diseases. Its main products include DARZALEX, TREMFYA, CARVYKTI, ERLEADA, SPRAVATO and CAPLYTA. MedTech makes devices for surgery, orthopaedics, heart treatment (such as electrophysiology and Shockwave) and vision care (such as contact lenses and eye lenses for cataract surgery). In 2025, sales were $94.2 billion. In Q3 2026, sales were $25.4 billion: Innovative Medicine gave $16.8 billion and MedTech gave $8.6 billion. About 59% of Q3 2026 sales came from the United States. The company plans to separate its Orthopaedics business (DePuy Synthes) into a new company by mid-2027. Its fiscal year ends on the Sunday closest to December 31.
- Thesis
- Johnson & Johnson trades at a premium because investors pay for steady growth, a strong balance sheet and a pipeline that replaces old products quickly. Sales grew 5.9% in Q3 2026, even though STELARA lost about 4.2 points of growth to biosimilars, and the company expects 2026 sales of more than $100 billion for the first time. New products such as TREMFYA, CARVYKTI, TECVAYLI, RYBREVANT, CAPLYTA, IMAAVY and the oral psoriasis pill ICOTYDE carry this growth. Investors also see a lower talc risk, because in July 2026 the company agreed to a $5.5 billion plan to settle the ovarian cancer claims. But adjusted EPS grows only 2.9% in 2026 at the guidance midpoint of $11.10, because the Firefly and Sail deals cost about $0.64 per share. For the premium to be earned, four things must be true. Adjusted operational sales must keep growing about 6% or more in 2027, while SIMPONI and STELARA biosimilars take more sales. Adjusted EPS must return to faster growth in 2027, after the 2026 deal costs. At least 95% of the remaining ovarian claims must join the settlement, so that the first payment of no more than $3 billion can start in 2027. The Orthopaedics separation must close by mid-2027 without a loss of value. The Enterprise Business Review on December 8, 2026 and the full-year 2026 report in January 2027, with the 2027 guidance, are the next tests. The premium can shrink if 2027 growth guidance is weak, if the talc settlement fails, or if US drug price rules cut prices more than expected.
- Risks
- The ovarian talc settlement needs at least 95% of the remaining claims to join. If it fails, the cases go back to trial. The mesothelioma cases continue outside the plan, and the company also faces talc cases in Canada. The talc reserve was about $9.0 billion at September 27, 2026.
Biosimilars cut sales of older medicines. STELARA lost about 4.2 points of worldwide sales growth in Q3 2026. SIMPONI biosimilars entered Europe in Q2 2026, and a US biosimilar can come later in 2026.
US drug price policy can lower prices. Medicare price negotiation, international reference prices and the company's voluntary pricing agreements with the US government can cut revenue from some medicines.
The separation of the Orthopaedics business is complex. It costs money (about $0.7 billion in the first nine months of 2026), and a delay past mid-2027 or a weak new company can lower value for shareholders.
MedTech grows slowly. MedTech operational sales grew only 2.5% in Q3 2026, and conflicts in the Middle East lowered growth in Surgery.
- Balance sheet
- Cash: $17.2B
Debt: $44.7B
Net debt: $27.4B
Undrawn credit line: $12.5B, to June 2027
Debt due within 12 months: $8.9B
Johnson & Johnson funds itself with bonds and commercial paper. At September 27, 2026, cash, cash equivalents and marketable securities were about $17.2 billion. Notes payable and long-term debt were about $44.6 billion, of which $8.9 billion was short-term loans and notes payable, so net debt was $27.4 billion, almost the same as a year earlier. The company can issue up to $20 billion of commercial paper, and in June 2026 it signed a new 364-day credit facility of $12.5 billion that ends on June 23, 2027. It must also pay about $9.0 billion for talc matters, about $3.2 billion of bonds that are due soon, about $2.6 billion if it uses its option to buy Sail and about $0.9 billion for opioid settlements. In the first nine months of 2026, cash from operations was $18.9 billion, and the company paid $9.6 billion of dividends and $6.0 billion for its own shares. Free cash flow was about $15.1 billion in that period, as the company estimated on October 13, 2026.
As of 2026-09-27.
- Checkpoints
- Dec 8, 2026: Enterprise Business Review: growth plan. Pending. Watch: A clear plan for growth of about 6% or more and for faster adjusted EPS growth in 2027 passes; a weaker 2027 outlook or new large deal costs fail.
Jan 20, 2027 (estimate): Full-year 2026 results and 2027 guidance. Pending. Watch: 2027 guidance with adjusted operational sales growth of about 6% or more and adjusted EPS growth faster than in 2026 passes; lower growth guidance fails.
Jun 2027 (estimate): Talc settlement and Orthopaedics separation. Pending. Watch: At least 95% of ovarian claims in the settlement and the Orthopaedics separation on time by mid-2027 pass; a failed settlement or a delay of the separation fails.
- Recent events
- 2026-10-27: Johnson & Johnson said that it will hold its Enterprise Business Review for investors on December 8, 2026. The CEO, the CFO and the leaders of MedTech and Innovative Medicine will present the strategy, the pipeline and a financial overview.
2026-10-13: Johnson & Johnson reported Q3 2026 results. Sales grew 5.9% to $25.4 billion, with operational growth of 6.0%. Innovative Medicine grew 7.9% operationally and MedTech grew 2.5%. EPS fell to $0.09 because of a $5.5 billion charge for the proposed talc settlement and the costs of the Firefly and Sail deals. Adjusted EPS fell 7.5% to $2.59. The company raised its 2026 guidance to reported sales of $101.0 billion to $101.4 billion and adjusted EPS of $11.05 to $11.15. It kept the quarterly dividend at $1.34 per share.
2026-10-13: In Q3 2026, the FDA gave market authorization to the OTTAVA robotic surgical system and approved IMAAVY for warm autoimmune hemolytic anemia. RYBREVANT FASPRO received FDA priority review for advanced head and neck cancer.
2026-08-04: Johnson & Johnson said that Jennifer Taubert, the head of Innovative Medicine, will retire on September 1, 2026. Tom Cavanaugh became the new head of Innovative Medicine.
2026-07-29: Johnson & Johnson completed its purchase of Firefly Bio, a cancer drug developer, for about $1.0 billion in cash. It also started a collaboration with Sail Biomedicines on in vivo CAR-T therapies for immune diseases, with initial payments of $0.8 billion and an option to buy Sail for about $2.6 billion. The company said that the two deals lower 2026 adjusted EPS by about $0.64, and it cut its adjusted EPS guidance.
2026-07-27: Johnson & Johnson agreed with the plaintiff firms that lead the federal and related state cases on a plan to settle the ovarian cancer talc claims. The company commits $5.5 billion. The first payment is no more than $3 billion in 2027, with no more payments before 2028. The plan needs at least 95% of the remaining claims to join. The mesothelioma cases are not part of the plan.
2026-07-15: Johnson & Johnson reported Q2 2026 results. Sales grew 6.6% to $25.3 billion, and adjusted EPS grew 4.7% to $2.90. The company raised its 2026 guidance before the Firefly and Sail deals.
2026-04-14: Johnson & Johnson reported Q1 2026 results. Sales grew 9.9% to $24.1 billion, and adjusted EPS was $2.70. In the quarter, the FDA approved ICOTYDE, the first targeted oral peptide for moderate to severe plaque psoriasis, and TECVAYLI with DARZALEX FASPRO for multiple myeloma as early as the second line of treatment.
2026-01-21: Johnson & Johnson reported 2025 results. Sales grew 6.0% to $94.2 billion, and adjusted EPS was $10.79. The company gave its first 2026 guidance, with sales of about $100.5 billion.