Johnson & Johnson JNJ will begin the earnings season for the drug & biotech sector when it reports its first-quarter 2026 results on April 14. The Zacks Consensus Estimate for first-quarter sales and earnings is pegged at $23.44 billion and $2.68 per share, respectively.
The Zacks Consensus Estimate for 2026 earnings has been stable at $11.54 per share over the past 60 days, while that for 2027 earnings has gone up from $12.40 per share to $12.45 over the same time frame.
JNJ Estimate Movement
JNJ’s Earnings Surprise History
The healthcare bellwether’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 3.56%, on average. In the last reported quarter, the company delivered an earnings surprise of 1.23%.
JNJ’s EPS Surprise
J&J has an Earnings ESP of +3.26% and a Zacks Rank #2 (Buy), indicating a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 or #3 (Hold) have a good chance of delivering an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping JNJ’s Upcoming Results
Sales in J&J’s Innovative Medicine segment are expected to have been driven by higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains.
The Zacks Consensus Estimate for Darzalex, Tremfya and Erleada is pegged at $3.81 billion, $1.42 billion and $919 million, respectively.
Other products like Xarelto, Simponi/Simponi Aria, Uptravi and Opsumit are likely to have witnessed continued growth. The rapid adoption of new drugs like Carvykti, Tecvayli, Talvey, Rybrevant, plus Lazcluze, Caplyta, and Spravato is likely to have contributed to top-line growth.
Sales of its key drug Stelara are likely to have declined due to the impact of biosimilar competition.
Several biosimilar versions of Stelara were launched in the United States in 2025. According to patent settlements and license agreements, Amgen AMGN, Teva Pharmaceutical Industries TEVA, Samsung Bioepis/Sandoz and some other companies launched Stelara biosimilars in 2025. Stelara’s LOE negatively impacted the Innovative Medicines segment’s growth by 10.4% in 2025. We expect the negative impact to be steeper in the first quarter of 2026 as the number of biosimilar entrants is expected to have increased.
The Zacks Consensus Estimate for Stelara sales is pegged at $1.0 billion.
Imbruvica sales are likely to have declined due to rising competitive pressure in the United States due to new oral competition. The Zacks Consensus Estimate for Imbruvica stands at $659.0 million.
Generic/biosimilar competition for drugs like Zytiga and Remicade is also likely to have hurt the top line.
The negative impact of the Part D redesign is expected to have weighed on sales of drugs like Stelara, Imbruvica and Erleada.
The Zacks Consensus Estimate for J&J’s Innovative Medicine unit is pegged at $15.05 billion.
J&J’s MedTech business is expected to continue seeing strong momentum in three focus areas: Cardiovascular, Surgery and Vision in the first quarter, backed by increased adoption of newly launched products.
J&J’s MedTech business has been facing continued headwinds in China, where sales are being hurt by the impact of the volume-based procurement (VBP) program. VBP is a government-driven cost containment effort in China. In the first quarter, sales in China are likely to have been hurt by the impact of the VBP program once again.
The Zacks Consensus Estimate for J&J’s MedTech segment stands at $8.57 billion.
Let us delve deeper to understand whether to buy, sell or hold J&J stock ahead of earnings.
JNJ’s Stock Price Performance & Valuation
J&J’s shares have outperformed the industry over the past year. The stock has risen 62.2% in the past year compared with 26.1% appreciation of the industry. The stock has also outperformed the sector and S&P 500 index as seen in the chart below.
JNJ Stock Outperforms Industry, Sector & S&P 500
From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 20.48 forward earnings, higher than 17.09 for the industry. The stock is also trading above its five-year mean of 15.65.
JNJ Stock Valuation
Investment Thesis on JNJ
J&J’s biggest strength is its diversified business model, as it not only has pharmaceuticals but also medical devices, which help it withstand economic cycles more effectively.
J&J’s Innovative Medicine unit is showing a growth trend. The segment’s sales rose 4.1% on an organic basis in 2025 despite the loss of exclusivity (“LOE”) of its multi-billion-dollar product, Stelara. J&J’s MedTech business has also improved in the last three quarters. J&J expects accelerated growth in both the Innovative Medicine and MedTech segments in 2026, backed by new products.
The company rapidly advanced its pipeline in 2025, attaining significant clinical and regulatory milestones that will help drive growth through the back half of the decade. J&J believes 10 of its new products/pipeline candidates in the Innovative Medicine segment have the potential to deliver peak sales of $5 billion, including Talvey, Tecvayli, Imaavy, Caplyta, Inlexzo, Rybrevant, plus Lazcluze and Icotyde.
However, the Stelara patent cliff, the upcoming LOE of key drugs Opsumit and Simponi, the impact of Part D redesign, slowing sales in China in the MedTech segment and the pending talc lawsuits are significant headwinds.
Consider Investing in J&J Stock
J&J outperformed financial expectations in 2025 and looks optimistic for continued strong momentum in 2026, with a target to generate around $100 billion in revenues in the year. It also boasts strong cash flows and has consistently increased its dividends for 63 consecutive years.
Despite its several headwinds, J&J looks quite confident that it will be able to navigate these challenges.
No matter how the first-quarter’s results play out, one may consider investing in JNJ, considering its price appreciation, rising estimates, consistent earnings and sales growth, important new launches, and pipeline depth.
Free Report: Profiting from the 2nd Wave of AI Explosion
The next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.
Investors who bought shares like Nvidia at the right time have had a shot at huge gains.
But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.
Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.
Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Johnson & Johnson (JNJ): Free Stock Analysis Report
Amgen Inc. (AMGN): Free Stock Analysis Report
Teva Pharmaceutical Industries Ltd. (TEVA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).