Johnson & Johnson (JNJ) is set to report its fourth-quarter earnings on Tuesday, and Wall Street analysts are eagerly awaiting the results. The market expects the company to report $2.28 in earnings per share (EPS) and $20.99 billion in revenue, as the report is scheduled to be released before market hours.
With a market capitalization of over $389 billion, Johnson & Johnson is one of the most valuable companies in the world. It is also one of only two U.S.-based companies that has a prime credit rating of AAA, with the other being Microsoft (MSFT). The company is primarily focused on developing and producing pharmaceutical prescription drugs and medical device technologies. Some of its most well-known products include Band-Aids, Tylenol, and Johnson’s Baby Powder.
Analysts will be closely watching Johnson & Johnson’s earnings report, particularly in light of recent events. In 2023, the company split off its Consumer Health segment, resulting in the creation of Kenvue Inc (KVUE) stock. Additionally, the company recently reached a $700 million settlement for ongoing litigation regarding its talc-based baby powders. While this settlement has impacted the company’s financials and consumer confidence, it is seen as a strategic move to manage future costs and minimize long-term damage.
Despite these challenges, Johnson & Johnson’s investment thesis remains strong. The company has a long history of providing value to shareholders through dividends and maintaining a solid balance sheet. Its well-diversified Innovative Medicine and MedTech segments, which focus on immunology, oncology drugs, surgical devices, and orthopedics, contribute to its overall strength. Furthermore, the recent acquisition of Abiomed, Inc. for $16.6 billion has bolstered the company’s position in coronary artery disease and heart failure treatment.
Johnson & Johnson has also announced a $2 billion acquisition of Ambrx Biopharma Inc, signaling its expansion into targeted cancer therapies. These strategic moves demonstrate the company’s commitment to innovation and growth in the healthcare industry.
Despite the challenges posed by the talc litigation and the Kenvue split-off, Johnson & Johnson has a strong track record of paying and growing dividends for 61 years. This suggests that the safety of its dividend remains intact.
Looking ahead to the fourth-quarter earnings report, analysts will be focusing on the dividend safety following the Kenvue split-off, as well as the impact of the talc lawsuit settlement and the acquisition of Ambrx Biopharma. The consensus analyst rating on Johnson & Johnson stock currently stands at Neutral, with a consensus price target of $175.75 per share.
In Friday’s trading, shares of Johnson & Johnson closed 0.29% higher at $161.68. As investors eagerly await the earnings report, it will be interesting to see how the stock performs in the coming weeks.
In conclusion, Johnson & Johnson’s fourth-quarter earnings report is highly anticipated, and analysts will be closely watching the impact of recent events on the company’s financials. Despite challenges, Johnson & Johnson’s diversified portfolio and long-standing track record make it a reliable investment option.
