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Investing.com - Goldman Sachs has reiterated its Conviction Buy rating on Johnson & Johnson (NYSE:JNJ) stock with a price target of $177.00 ahead of the company’s second-quarter earnings report scheduled for July 16.
The firm expects JNJ to deliver results largely in line with consensus estimates, though notes there will be "several moving parts up and down the P&L." Goldman projects stronger performance than consensus for key products including Tremfya (approximately 2% above consensus) and Carvykti (approximately 10% above consensus) in the Innovative Medicine business.
Goldman Sachs emphasizes that the trajectory of JNJ’s Innovative Medicine segment, which represents about 65% of revenues but 83% of profit, will be more significant for stock performance than the MedTech division. For the MedTech business, the firm anticipates investor focus will center on initial macroeconomic indicators for the sector.
The firm acknowledges investor concerns about a potentially challenging second half of 2025 due to ongoing talc litigation, with the next update expected in fall. This litigation overhang comes amid JNJ’s year-to-date stock outperformance, as it has emerged as the top performer in U.S. pharmaceuticals, up 8% compared to the flat performance of the NYSE Arca Pharmaceutical (TADAWUL:2070) Index.
Goldman notes that following JNJ’s impressive first-quarter results in its Innovative Medicines business, earnings per share and sales revisions have trended more positively compared to both pharmaceutical peers and the broader market, which could provide a tailwind in a macroeconomic environment where defensive stocks typically outperform when the Federal Reserve resumes its rate-cutting cycle.
In other recent news, Johnson & Johnson has submitted a supplemental New Drug Application to the U.S. FDA for CAPLYTA, aimed at preventing relapse in schizophrenia. This submission is backed by Phase 3 trial data showing a 63% reduction in relapse risk compared to placebo. Meanwhile, Johnson & Johnson’s IMAAVY has demonstrated sustained disease control in myasthenia gravis patients, with findings presented at the European Academy of Neurology 2025 Congress highlighting its effectiveness. Additionally, the company’s experimental dual-targeting CAR T-cell therapy has shown high response rates in patients with relapsed or refractory large B-cell lymphoma, with complete response rates reaching up to 80% in a Phase 1b study.
Furthermore, promising results were reported for Johnson & Johnson’s leukemia drug bleximenib, which showed significant antileukemic activity when combined with venetoclax and azacitidine for acute myeloid leukemia. The study revealed an overall response rate of 82% in relapsed or refractory AML patients at the recommended Phase 2 dose. In another development, Johnson & Johnson’s Tremfya demonstrated a significant reduction in joint damage for psoriatic arthritis patients in the Phase 3b APEX study. The study indicated Tremfya reduced joint structural damage progression by two and a half times compared to placebo over 24 weeks. These developments underscore Johnson & Johnson’s ongoing efforts in advancing treatments across various medical conditions.
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