Johnson & Johnson JNJ will begin the earnings season for the drug & biotech sector when it reports its first-quarter 2025 results on April 15. The Zacks Consensus Estimate for first-quarter sales and earnings is pegged at $21.66 billion and $2.57 per share, respectively. The Zacks Consensus Estimate for J&J’s earnings has declined from $10.58 per share to $10.57 per share for 2025, while that for 2026 has declined from $11.07 per share to $11.02 per share over the past 60 days.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

JNJ Estimate Movement

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JNJ’s Earnings Surprise History

The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 4.43%, on average. In the last reported quarter, the company delivered an earnings surprise of 2.0%.

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JNJ’s Stock Price & EPS Surprise

J&J has an Earnings ESPof -2.53% and a Zacks Rank #3 (Hold). Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Factors Shaping JNJ’s Upcoming Results

Sales in J&J’s Innovative Medicines segment are expected to have been driven by higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains.

For Darzalex, the consensus mark is pegged at $3.13 billion, while our model estimates sales of $3.15 billion.

The Zacks Consensus Estimate for Tremfya is $939.0 million, while our model estimate is $989.7 million.

The Zacks Consensus Estimate for Erleada sales is $817.0 million, while our model projects sales to be $855.3 million.

Other products like Invega Sustenna, Uptravi and Spravato are likely to show growth. The rapid adoption of new drugs like Carvykti, Tecvayli and Talvey are likely to have contributed to top-line growth.

Sales of the key drug Stelara are likely to have declined due to the impact of current and potential biosimilar competition.

A biosimilar version of Stelara was launched in certain European markets for some indications in July 2024. Several biosimilar versions of Stelara are expected to be launched in the United States in 2025. Amgen AMGN launched the first Stelara biosimilar, Wezlana, in January 2025. Stelara biosimilar competition is expected to accelerate throughout 2025 as the number of biosimilar entrants increases.

The Zacks Consensus Estimate for Stelara sales is pegged at $1.64 billion, while our model projects sales of $1.66 billion.

Imbruvica sales are likely to have declined due to rising competitive pressure in the United States due to new oral competition. The Zacks Consensus Estimate for Imbruvica is $678.0 million, while our model indicates sales to be $703.0 million.

Sales of Xarelto and Simponi/Simponi Aria improved in the fourth quarter of 2024. It remains to be seen if the positive trend continued in the first quarter of 2025.

Generic/biosimilar competition for drugs like Zytiga and Remicade is likely to have hurt the top line.

The negative impact of the Part D redesign and a heavier impact from Fx are expected to have weighed on the Innovative Medicine segment in the first quarter.

The Zacks Consensus Estimate for J&J’s Innovative Medicine unit is $13.46 billion, while our estimate is $13.57 billion. 

The MedTech segment is expected to have faced difficult year-over-year comparisons in the first quarter.

J&J’s MedTech business has been facing continued headwinds in the Asia Pacific, specifically in China, where sales are expected to have been hurt by the impact of the volume-based procurement (VBP) program and the anti-corruption campaign. VBP is a government-driven cost containment effort in China. J&J does not expect any improvement in its business in the Asia Pacific region, specifically in China, in the first quarter or other quarters of 2025. Competitive pressure is likely to continue to hurt sales growth in some MedTech businesses like U.S. electrophysiology for PFA ablation catheter.

However, new product uptake and commercial execution are expected to have boosted growth in other markets in the MedTech segment.

The Zacks Consensus Estimate as well as our model estimate for J&J’s MedTech segment is $8.14 billion.

Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold J&J stock ahead of earnings.

JNJ’s Stock Price Performance & Valuation

So far this year, J&J’sstock has risen 3.6% against a decrease of 4.8% for the industry. The stock has also outperformed the sector as well as the S&P 500, as seen in the chart below.

JNJ Stock Outperforms Industry, Sector & S&P 500

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From a valuation standpoint, J&J is reasonably valued. Going by the price/earnings ratio, the company’s shares currently trade at 13.87 forward earnings, slightly lower than 14.81 for the industry. The stock is trading slightly below its five-year mean of 15.94.

JNJ Stock Valuation

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Investment Thesis for JNJ

J&J’s biggest strength is its diversified business model. With last year’s complete separation of the Consumer Health segment into a newly listed company called Kenvue KVUE, J&J has now become a two-sector company focused on the Pharmaceutical and MedTech fields.

J&J’s Innovative Medicine unit is showing a growth trend. In 2025, J&J expects growth in the Innovative Medicine segment to be driven by its key products, such as Darzalex, Tremfya, Spravato and Erleada, as well as new drugs like Carvykti, Tecvayli and Talvey, and new indications for Tremfya and Rybrevant.

J&J is also making rapid progress with its pipeline and has been on an acquisition spree lately, which has strengthened its pipeline. 

Continuing the M&A momentum, in April, J&J closed its previously announced acquisition of Intra-Cellular Therapies for approximately $14.6 billion, strengthening its presence in the neurological and psychiatric drug market.

However, the softness in the MedTech unit, the Stelara patent cliff and the potential impact of Part D redesign will be significant headwinds in 2025. It remains to be seen how the company navigates them. Stelara generated sales of $10.36 billion in 2024. The launch of generics is expected to significantly erode the drug’s sales, hurting J&J’s sales and profits in 2025.

The legal battle surrounding its talc lawsuits has created a bearish sentiment around the stock. The lawsuits allege that its talc products contain asbestos, which caused many women to develop ovarian and some other cancers. Earlier this month, a bankruptcy court in Texas rejected J&J’s proposed bankruptcy plan to settle its talc lawsuits. J&J will go back to the traditional tort system to fight the lawsuits individually with its bankruptcy strategy to settle the lawsuits failing for the third time.

Stay Invested in J&J’s Stock

J&J has shown steady revenue and EPS growth for years. No matter how the first-quarter results play out, those who already own this company’s shares may stay invested for some time as J&J looks poised for a better performance in 2025.  

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