So, Johnson & Johnson (JNJ) just kicked off its year with a solid first quarter, beating expectations and giving everyone a reason to talk about its "year of accelerating growth." The company reported total sales of $24.06 billion and earnings of $2.70 per share, topping the consensus estimates of $23.61 billion and $2.68 per share, respectively. Not bad for a start.
But here's the funny thing: even with numbers like that, the stock was trending lower, down about 1.03% to $237.61 when this was published. Sometimes the market just needs a minute to process the good news, I guess.
Analyst Vamil Divan from Guggenheim Securities isn't sweating the dip. He maintained a Buy rating on the stock and called the latest results a setup for "greater potential upside ahead." He thinks the company's revenue and earnings growth are likely to accelerate through this year and even into the back half of the decade. In his note, Divan pointed out that the beat versus his estimates was "driven primarily by Tremfya, Invega, Xarelto and Darzalex, largely offset by lower sales from Stelara, Spravato, and Medtech." So, a mix of winners and some softer spots, but overall, the engines are running.
Management seems confident, too. They raised their 2026 sales guidance from $100-$101 billion to $100.3-$101.3 billion. Of that $300 million increase at the midpoint, $200 million came from improved operations and $100 million from currency fluctuations. They also bumped up earnings guidance from $11.43-$11.63 per share to $11.45-$11.65 per share, citing increased operational earnings.
CFO Joe Wolk summed it up: "Johnson & Johnson delivered a solid quarter while advancing our portfolio and investing in our new launches to accelerate growth over the long term." He added that the company would keep putting money into "innovative science and technology." And as a little cherry on top, they raised the annual dividend from $5.20 per share to $5.36 per share. Because why not share the wealth when things are going well?
Divan wrapped it up by saying, "We continue to see JNJ as one of our Top Picks in large cap biopharma." So, if you're looking at big pharma stocks, this one's apparently still on the recommended list, quarter after quarter of solid performance and a raised dividend to boot.
