Johnson & Johnson’s pipeline must support a richer stock valuation
The shares gained about 42% in a year, while older drug sales declined and newer medicines face pressure to sustain growth.
Key takeaways
- Johnson & Johnson shares rose 41.66% in the year to Sept. 30, while the S&P 500 gained about 14.41%.
- STELARA sales fell 55.2% year over year in fiscal Q2, to $740 million.
- The article puts J&J’s forward P/E at about 23.89 and its premium to the sector at 28.02%.
Johnson & Johnson shares climbed 41.66% to $264.74 in the year through Sept. 30, while the S&P 500 gained about 14.41%. The rise has put attention on whether the company’s newer products can support its valuation as sales of older medicines decline.
The company’s growth prospects include TREMFYA, CARVYKTI and CAPLYTA, alongside expansion in MedTech. J&J said CAPLYTA could have more than $5 billion in peak-year sales. Its 2026 launch of the Shockwave C2 Aero catheter is designed to broaden use of intravascular lithotripsy in complex coronary procedures.
But established drugs remain a drag. In fiscal Q2 2026, Innovative Medicine’s worldwide operational sales grew 6.8%, with growth partly offset by STELARA, which had an approximately 760-basis-point negative impact, and declines in REMICADE, IMBRUVICA and ZYTIGA.
STELARA sales fell 55.2% year over year to $740 million. That decline highlights the need for newer products to expand enough to offset pressure on mature medicines.
At $262.02, the article said J&J traded at about 23.89 times forward earnings, a 28.02% premium to the sector. The company reported adjusted EPS growth of 8.1% in 2025, leaving investors to weigh that growth against the market’s expectations for its pipeline.
This article was produced with the help of AI technology. Source: Yahoo Finance
