Johnson & Johnson (NYSE:JNJ) shares gained in the premarket on Tuesday after Guggenheim upgraded the stock to Buy from Neutral, citing potential in its Innovative Medicine unit to offset an ongoing patent cliff for its blockbuster drug Stelara.
Analyst Vamil Divan also boosted his price target on JNJ to $206 from $167, welcoming how the company has faced the loss of exclusivity for the Crohn’s disease therapy, which is currently facing U.S. generics after accounting for more than 10% of the company’s sales in 2024.
“With the company now close to annualizing the negative impact of this loss, we see the potential for even stronger top-line and bottom-line growth going forward,” Divan wrote, highlighting multiple JNJ products as reasons for his bullish thesis.
The analyst expects more meaningful upside from well-known JNJ products such as Tremfya, Darzalex, Spravato, and Caplyta, as well as newer treatments such as Rybrevant, which he says are not fully appreciated on Wall Street.
While JNJ has outperformed the S&P 500 (SP500) since the company’s Q2 2025 earnings call, in which the management shared bullish remarks on the company’s H2 2025 and 2026 outlook, Divan projects further gains for the stock.
“We believe continued progress with key marketed and pipeline assets should meaningfully increase investors’ expectations for JNJ’s growth outlook in 2027 and beyond, leading to positive consensus estimate revisions and multiple expansion,” he wrote.