Johnson & Johnson Q3 Preview: Decline in profit is in the cards

Johnson & Johnson (NYSE:JNJ) is scheduled to announce Q3 earnings results on Tuesday, October 15th, before market open.

Analysts expect a profit of $2.21 per share (-16.9% Y/Y) on revenue of $22.17B (+3.8% Y/Y).

The company is expected to post in-line results, as it continues to navigate its MedTech portfolio.

According to J.P Morgan, “We see JNJ’s underlying business as well positioned and capable of generating 5%+ sustained top-line growth, with an Innovative Medicines segment that can generate mid-single-digit growth through 2030 (despite biosimilar competition for its largest drug – Stelara) and a MedTech portfolio that continues to pivot towards higher growth verticals.”

Over the last 2 years, JNJ has beaten EPS estimates 100% of the time and has beaten revenue estimates 88% of the time.

Over the last 3 months, EPS estimates have seen 0 upward revisions and 16 downward. Revenue estimates have seen 4 upward revisions and 10 downward.

SA analyst Grassroots Trading says, “Despite lagging behind the S&P in price growth, JNJ offers a solid income investment with a 3.09% dividend yield and steady financials. Risks include short-term costs from acquisitions, supply chain issues in the Vision division, and external pressures like currency fluctuations and competition.”

JNJ is rated as a Hold on the SA Quant ratings, while Wall Street analysts rate it as a Buy.

The stock rose 2.4% in the last 12 months.