Johnson & Johnson Finetunes 2024 Bottom Line Guidance

Image: J&J’s shares have faced pressure since the beginning of 2023.

By Brian Nelson, CFA

Johnson & Johnson (JNJ) reported better-than-expected second quarter results on July 17. The company put up adjusted operational growth excluding the COVID-19 vaccine of 7.1%, while adjusted earnings per share was $2.82, up 10.2% on a year-over-year basis. The company’s Innovative Medicine division experienced an 8.8% worldwide operational revenue increase, excluding the COVID-19 vaccine, thanks to strength in DARZALEX, ERLEADA, TREMFYA, STELARA, SPRAVATO, and its Other Oncology segment. Its MedTech worldwide operational revenue advanced 4.4% thanks to strength in electrophysiology products and Abiomed in its Cardiovascular segment.

Management had the following to say about the quarter:

Johnson & Johnson’s second quarter performance reflects our relentless focus on advancing the next wave of medical innovation and resulted in strong sales and adjusted operational earnings per share growth. With a robust pipeline, upcoming regulatory milestones for RYBREVANT and TREMFYA, the integration of Shockwave, and continued expansion of newly launched products, including ACUVUE OASYS MAX 1-Day contact lenses and our VARIPULSE platform, we have a strong foundation for near and long-term growth. 

Looking to all of 2024, J&J continues to expect adjusted operations sales growth in the range of 5.5%-6%, but it finetuned adjusted operational earnings per share to the range of $10.00-$10.10 from $10.60-$10.75 previously. The company’s improved performance was offset by the collective impact of its recent acquisitions of Shockwave Medical, Proteologix, and NM26 Bispecific Antibody. We’re not reading too much into the downward bottom-line guidance revision as J&J remains a free-cash-flow cow with a pristine AAA credit rating. Though J&J is not included in any newsletter portfolio, it’s hard not to like the company. Shares yield ~3.3% at the time of this writing.