Johnson & Johnson (JNJ) saw its shares drop nearly 6% on October 13, 2026, following the release of its third-quarter earnings. Despite beating Wall Street estimates on both revenue and earnings, the decline was driven by underperformance in its MedTech segment. Since then, the stock has partially recovered, rising 2.1% from its post-earnings low.
The company's management pointed to geopolitical challenges, including the Middle East conflict and pricing pressures in China, as factors that may keep investors cautious. However, JNJ's fundamentals remain strong, with a modest increase in its full-year 2026 revenue and earnings guidance. Year to date, JNJ's shares have surged 22.4%, outperforming the S&P 500's 12.1% gain.
In its third-quarter results, JNJ reported adjusted earnings per share of $2.59, exceeding estimates by 2.4%, while sales narrowly missed expectations. The Immunology division saw exceptional growth in TREMFYA sales, up 68%, but STELARA declined 54% due to competitive pressures. The MedTech segment grew 2.5% year-over-year, driven by electrophysiology products and contact lenses.
Given the mixed reaction to JNJ's earnings, investors may consider healthcare exchange-traded funds (ETFs) with significant exposure to the company. Notable options include the iShares U.S. Pharmaceuticals ETF (IHE), with a 21.70% stake in JNJ, the State Street Health Care Select Sector SPDR ETF (XLV) at 9.60%, and the Vanguard Health Care ETF (VHT) at 8.78%. These ETFs offer diversification while still benefiting from JNJ's growth.