Johnson & Johnson (JNJ) has faced challenges recently, underperforming its healthcare sector peers. Despite solid first-quarter earnings, the market remains concerned about potential legal liabilities related to its talc products. However, JNJ’s robust profitability and diversified business mitigate these risks.
JNJ’s focus on Innovative Medicine and MedTech segments has driven growth. Innovative Medicine grew by 2.5% and MedTech by 6.3% in Q1. The acquisition of Shockwave in cardiology is expected to further strengthen its position in the market.
Despite headwinds from Stelara biosimilars, JNJ expects its MedTech segment to maintain momentum. The company’s strong balance sheet and commitment to M&A provide flexibility for growth-oriented investments.
JNJ recently raised its dividend by 4.2%, appealing to income investors. While talc-related liabilities pose risks, JNJ’s reasonable valuation and strong fundamentals make it an attractive option for long-term investors. Dip-buyers have supported the stock recently, suggesting a favorable entry point for those seeking exposure.
Maintaining a Buy rating, investors are reminded to conduct due diligence and consider this article as supplemental information. The rating does not suggest a specific entry/exit point unless otherwise stated.
