Johnson & Johnson (JNJ +6%) has seen a significant rise in its stock price after reporting robust Q2 results. The company posted a 5.8% year-over-year revenue increase to $23.74 billion, alongside a boost in EPS and revenue guidance for FY25. Growth was observed in both its Innovative Medicine and MedTech segments.
- Innovative Medicine Segment: Sales grew 4.9% year-over-year to $15.20 billion, surpassing $15 billion for the first time. Despite losing exclusivity for STELARA, a multi-billion dollar product, the segment showed strong performance, driven by double-digit growth across 13 brands, including Darzalex.
- JNJ aims to eliminate cancer, with over ten products on the market and more than 25 in late-stage development. The company expects to become the leading oncology firm by 2030, targeting sales of over $50 billion, with approximately 80% of myeloma patients currently using JNJ medicines.
- MedTech Segment: Sales increased by 7.3% year-over-year to $8.54 billion, showing significant acceleration from Q1. Growth was fueled by advancements in cardiovascular, surgery, and vision areas. JNJ remains a leader in heart recovery and circulatory restoration, focusing on high-growth markets.
- JNJ anticipates higher sales growth in both its Innovative Medicine and MedTech segments in the second half of 2025. The company expects Stelara's biosimilar competition to intensify, while MedTech growth will be driven by new product adoption in cardiovascular surgery and vision.
Overall, JNJ delivered a strong quarter with a notable EPS beat, rebounding from slower growth in Q1. Despite the challenge of losing Stelara's exclusivity, JNJ is managing the situation effectively. The raised FY25 guidance indicates expected acceleration in the latter half of the year. Additionally, JNJ reduced its estimated tariff impact on the MedTech segment to $200 million from $400 million, contributing to the stock's upward movement.
