JNJ Proves Doubters Wrong by Raising Guidance

Johnson & Johnson (JNJ:US) announced its third-quarter earnings earlier today and posted a surprise beat while raising guidance. This was JNJ’s first quarterly earnings report since the Kenvue Stock Swap that ended in late August.

The company reported an EPS of $2.66, comfortably beating the analyst estimates of $2.52. The earnings were up over 4% from the same quarter last year. The revenues also beat analyst estimates ending at $21.5 billion against estimates of $21.04 billion.

On a business segment level, the company’s pharma business and medtech both reported healthy growth. It has now increased its 2023 EPS estimates to around $10.10 per share, expecting yearly sales to top around the $84 billion mark.

The future of the company bodes well as per CEO Joaquin Duato. “With a sharpened focus on Innovative Medicine and MedTech solutions, Johnson & Johnson is innovating across the spectrum of healthcare and is poised to deliver the medical breakthroughs of tomorrow.” He said.

The stock hasn’t produced great returns in 2023 and is down over 10% YTD. This has prompted many people to doubt the pharma giant’s ability to deliver improved profits. However, the company has put these doubts to rest with a stellar quarterly performance.

In the last 3 months, politicians have sold $69,000 - $210,000 worth of JNJ stock. On the other hand, only $3,000 - $45,000 buy transactions were reported in the same period. Political investors certainly do not feel confident buying JNJ stock lately. Ro Khanna has been the biggest doubter selling $50,000 - $100,000 worth of stock recently. Scott Franklin’s sale of $15,000 - $50,000 looks like a prudent financial move with the stock below his selling price. However, the company’s fundamentals and a strong quarterly report suggest there is nothing wrong with the business.

JNJ stock received a boost in pre-market trading right after the earnings announcement. However, with the wider market under pressure, the stock just slipped into red territory minutes before the market opened.