Overview
Johnson & Johnson
JNJ · NYSEQ3 2026Healthcare · Pharma & MedTech
Since the Report + 7.4%
Revenue grew 5.9% year over year, EPS beat the estimate by 2.4%; the stock fell 5.7% in its first reaction.
- SalesQ3
- $25.4B
- Expectation $25.38B · Beat by 0.1%
- EPSAdjusted
- $2.59
- Expectation $2.53 · Beat by 2.4%
Verdict
HOLDTwo of J&J's three gates were in line and one was open: sales beat expectations by 0.1% and adjusted EPS by 2.4%; score 56, verdict hold. The stock still fell 5.7% because MedTech sales of $8.64B missed expectations. What matters next is whether international MedTech growth climbs off roughly zero.
Close on Report DayOct 13
$248.61▼ 5.7%Report-Day Move
- Market Cap(Today)
- ≈ $643 B
- 1Y Return(At Report)
- + 30%
- P/E(At Today's Price · $10.65 · Trailing 12M)
- 25.1
- PEG(Company Guidance 2026)
- 8.65
- Net Margin(Trailing 12M)
- 16.2%
Earnings Summary
In 30 Seconds- Sales of $25.4B beat expectations by 0.1% and adjusted EPS of $2.59 by 2.4%; GAAP EPS fell to $0.09 on the talc charge.
- Full-year adjusted EPS guidance rose to $11.05-$11.15; the midpoint is only 0.2% above the $11.08 expectation.
- The stock closed down 5.7% at $248.61 as MedTech sales missed the $8.71B expectation and overshadowed pharma strength.
The Numbers
GAAP EPS
$0.09
Talc Charge · Prior Year $2.12
MedTech Sales
$8.64B
Expectation $8.71B · Missed by 0.8%
Stock Reaction
−5.7%
Close to Close · $248.61
Full-Year Adjusted EPS Guidance
$11.05-$11.15
Expectation $11.08 · Midpoint 0.2% Above
Quarterly Revenue ($ Billion)
23.99
Q3 25 · $24.0 B
24.56
Q4 25 · $24.6 B · QoQ + 2.4%
24.06
Q1 26 · $24.1 B · QoQ − 2.0%
25.31
Q2 26 · $25.3 B · QoQ + 5.2%
25.40
Q3 26 · $25.4 B · QoQ + 0.4% · YoY + 5.9%
Guidance midpoint
Q4 26E · Guidance midpoint · QoQ + 4.1% · YoY + 7.6%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
- Q4 26E
Q4 2026 Company Guidance
- Full-Year Reported Sales101.0 – 101.4 B101.0 B101.4 B101.0 – 101.4 B
Midpoint 101.2 · Market Expectation 101.4 · July Range 100.8–101.4In Line ✓ · 0.2% Below Expectation
- Full-Year Adjusted EPS11.05 – 11.15 $11.05 $11.15 $11.05 – 11.15 $
Midpoint 11.10 · Market Expectation 11.08 · July Midpoint 11.040.2% Above Expectation ▲ · In Line
- Full-Year Operational Sales Growth6.7% – 7.1%6.7%7.1%
Midpoint 6.9% · July Range 6.5%–7.1%Midpoint Up 0.1 Point ▲
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±3.3% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Oncology$7.60 BShare 29.9%▲ 16.4% YoY
- Immunology$4.22 BShare 16.6%▲ 1.3% YoY
Stelara down 54.4%
- Pulmonary Hypertension, Infectious Diseases & CVM$2.56 BShare 10.1%▼ 9.9% YoY
- Surgery$2.53 BShare 10.0%▼ 0.6% YoY
- Neuroscience$2.38 BShare 9.4%▲ 17.3% YoY
- Orthopaedics$2.35 BShare 9.2%▲ 3.2% YoY
- Cardiovascular (MedTech)$2.31 BShare 9.1%▲ 4.3% YoY
- Vision$1.46 BShare 5.8%▲ 4.4% YoY
Key Metrics
Darzalex Sales
$4.24 B
▲ 15.4% YoYPress Release
Tremfya Sales
$2.40 B
▲ 68.3% YoYPress Release
Stelara Sales
$716 M
▼ 54.4% YoYPress Release
Carvykti Sales
$710 M
▲ 35.5% YoYPress Release
Spravato Sales
$624 M
▲ 36.1% YoYPress Release
Caplyta Sales
$398 M
▲ 66.1% YoYPress Release
Abiomed Sales
$412 M
▼ 2.3% YoYPress Release
Shockwave Sales
$325 M
▲ 16.8% YoYPress Release
Shares are computed over the segment total: $25.4 B. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“Johnson & Johnson's strong third-quarter performance and increased sequential growth reflect the accelerating momentum of our focused portfolio. This progress, together with strategic investments in high-growth areas, gives us clearer line of sight to double-digit growth by the end of the decade.”
- Accelerating Momentum of Focused Portfolio
- OTTAVA Opens New MedTech Chapter
- Double-digit Growth by Decade End
Summary and Review
Summary
Johnson & Johnson reported third-quarter sales of $25.4B. The market expected $25.38B, a 0.1% gap, so the revenue gate is in line. Adjusted EPS came in at $2.59, beating the $2.53 expectation by 2.4%; the earnings gate is open. The midpoint of full-year adjusted EPS guidance is $11.10, 0.2% above expectations. The sales guidance midpoint of $101.2B is 0.2% below expectations, so the guidance gate is in line. Two in-line gates and one open gate mean a hold.
The stock closed October 13 down 5.7% at $248.61. It touched $245.19 intraday, so the loss briefly exceeded 7%. MedTech triggered the selling: the segment sold $8.64B against an expected $8.71B. International MedTech sales grew only 0.1%. GAAP EPS fell to $0.09 because of the talc settlement charge. The market did not read this report as a growth story. Attention shifted from pharma strength to the slowdown in devices.
The picture has two sides. Pharma is strong: Innovative Medicine grew 7.7% and Tremfya sales rose 68%. That growth came despite a 54% collapse in Stelara. On the other hand, adjusted EPS fell 7.5% from last year's $2.80. Most of the decline comes from the Firefly and Sail deal costs booked to R&D. The company had flagged that burden at $0.64 per share for the year. The MedTech weakness and lower profit keep the score mid-band at 56.
Full Review
MedTech overshadowed the story.
The MedTech segment sold $8.64B, up 2.5% year over year. The market expected $8.71B, so sales fell 0.8% short. U.S. growth was 4.8%, but international growth was only 0.1%. Surgery sales declined 0.6%. The Abiomed heart pump business fell 2.3% to $412M. There were bright spots: Shockwave grew 16.8% and electrophysiology 4.9%. According to the earnings call, MedTech chief Tim Schmid said performance was below the company's internal standards. He cited volume-based procurement in China, competition in Asia and order disruptions in the Middle East. CFO Joe Wolk said budgets in the region are shifting from healthcare to defense. MedTech had grown 4.9% in the first nine months. This quarter's slowdown raised the question of whether it is temporary or lasting. That is where the 5.7% drop in the stock really comes from.
Pharma more than filled the Stelara gap.
Innovative Medicine sold $16.76B and grew 7.7%, with U.S. growth of 11.1%. Oncology rose 16.4% to $7.60B; roughly 30% of total sales now come from this area. Myeloma drug Darzalex grew 15.4% to $4.24B. Cell therapy Carvykti rose 35.5% to $710M. Tremfya, used in psoriasis and inflammatory bowel disease, sold $2.40B and grew 68.3%. That strength matters because former star Stelara shrank 54.4% to $716M under biosimilar competition. The company said Stelara cut segment growth by about 6.9 points. In neuroscience, Caplyta grew 66.1% and Spravato 36.1%. The weak link is pulmonary hypertension: Opsumit sales fell 35.7%. New products are replacing old ones faster than expected. That underpins the company's goal of double-digit growth by the end of the decade.
Talc settlement erased GAAP profit; cash is solid.
GAAP net earnings fell from $5.15B a year ago to $210M; EPS was $0.09. The main item behind the gap is a $5.52B litigation charge shown in the reconciliation table. On July 27 the company announced a proposed $5.5B settlement of ovarian cancer talc claims. The deal requires participation by at least 95% of the remaining claims. The first payment comes in 2027 and will not exceed $3B. No further payment is due before 2028. The charge is excluded from adjusted earnings, which is why adjusted EPS held at $2.59. Cash generation is solid. Nine-month free cash flow was about $15.1B, versus $14.2B a year earlier. On the earnings call, the full-year free cash flow outlook of about $21B was reiterated. The cash impact of the settlement is spread over time; the cash flow guide explains the distinction.
Guidance went up, but not past expectations.
J&J raised full-year adjusted EPS guidance from $10.96-$11.11 to $11.05-$11.15. The $11.10 midpoint is 0.2% above the $11.08 market expectation. Reported sales guidance is $101.0B-$101.4B, with a $101.2B midpoint. That is 0.2% below the $101.4B expectation. Guidance rose, but only to where the market had already priced it. Context matters: on July 15 the company gave an $11.68 midpoint. On July 29 it cut the midpoint to $11.04 because of the $0.64 per-share burden from the Firefly and Sail deals. Today's $11.10 implies 2.9% growth over 2025's $10.79. Excluding that burden, growth approaches 9%. The company expects to top $100B in annual sales for the first time. The earnings day guide walks through guidance comparisons step by step.
The threshold to watch is international MedTech growth.
This quarter pharma carried expectations while MedTech dragged them down. The single number for the next report is international MedTech growth. It was 0.1% this quarter and 2.2% operationally over nine months. The rule is simple: if international growth returns above 2% in the fourth quarter, management's temporary-disruption thesis holds. If it stays near zero, the slowdown looks structural and 2027 expectations come down. This number also shapes the orthopaedics separation. According to the earnings call, the company aims to separate DePuy Synthes by mid-2027. Wolk said a spin-off looks like the best option. On the pharma side the threshold is further away: as long as Tremfya and oncology keep growing double digits, the Stelara loss will not break the picture. What weighs on the score today is not profit but the loss of momentum in devices.
Looking Ahead
Strengths and Risks
5 Strengths · 6 RisksStrengths
5- Adjusted EPS of $2.59 beat the $2.53 market expectation by 2.4%.
- Oncology grew 16.4% to $7.60B and made up roughly 30% of total sales.
- Tremfya rose 68.3% to $2.40B, more than offsetting the $854M decline in Stelara.
- Full-year adjusted EPS guidance was raised to $11.05-$11.15 and sales guidance to $101.0B-$101.4B.
- Nine-month free cash flow of about $15.1B exceeded last year's $14.2B.
Risks
6- MedTech sales of $8.64B missed the $8.71B expectation by 0.8%İnternational growth slowed to 0.1%.
- Adjusted EPS fell 7.5% year over year and the adjusted pre-tax margin dropped from 35.2% to 30.2%.
- The talc settlement depends on at least 95% of remaining claims joiningİf that fails, litigation reopens.
- Stelara sales shrank 54.4% and cut segment growth by about 6.9 points.
- The sales guidance midpoint of $101.2B sits 0.2% below the $101.4B expectation.
- Abiomed fell 2.3% and Surgery 0.6%MedTech growth leans on a few products.
What to Watch
4- ~January 2027Q4 report; shows whether international MedTech growth recovers from 0.1%.
- End of 2026The company targets annual sales above $100B for the first time; guidance range is $101.0B-$101.4B.
- 2027First talc settlement payment of up to $3B; no further payment before 2028.
- Mid-2027Targeted separation of the DePuy Synthes orthopaedics business; management sees a spin-off as the leading option.
Upcoming Earnings
To Understand This