Johnson & Johnson Stock Continues to Climb Amid Mixed Business Performance
Johnson & Johnson (JNJ) has been on a remarkable run, with its stock climbing 56% in twelve months. This outperforms the S&P 500 and brings the company's price near its 52-week high.
The business is firing on multiple cylinders, thanks to the growth of its Innovative Medicine segment. Key drugs such as TREMFYA and DARZALEX are delivering remarkable sales growth, with TREMFYA reaching 71% in the most recent quarter. Even with biosimilar competition for STELARA, the company managed to grow double digits in the quarter.
However, not all is well at JNJ. The MedTech division is showing signs of strain, with a 2% sales decline in Abiomed's heart recovery business due to pressures on U.S. procedures. This slowdown could stall the stock's run and raise questions about whether the company can deliver on its updated forecast for full-year operational sales growth.
The market is charging a premium for JNJ's performance, with a price-to-earnings multiple of 30.0, significantly higher than the S&P 500 median of 23.7. Investors who prefer a broader approach to healthcare can consider broad healthcare funds that offer exposure to the sector without concentrating on a single name's valuation.