J&J Boosts 2026 Outlook on Strength in Core Medicines

Key Moments

2026 Guidance Tops Analyst Projections Despite Pricing Headwinds

On Jan 21, Johnson & Johnson (J&J) issued 2026 sales and profit guidance that came in ahead of Wall Street expectations, even after accounting for a financial impact described as “hundreds of millions of dollars” from a recent U.S. drug pricing agreement with the Trump administration.

The company is among 16 large pharmaceutical manufacturers that have entered into agreements to reduce U.S. drug prices in return for exemptions from tariffs imposed under Trump. J&J did not specify the exact financial impact of the deal.

“We can’t disclose specific details, but it’s hundreds of millions of dollars,” Chief Financial Officer Joseph Wolk said in an interview. “It’s a credit to the team here that we were able to surpass what (analyst) expectations are for 2026 by a pretty sizable amount while digesting that impact.”

J&J forecast 2026 operational sales between $99.5 billion and $100.5 billion, above analysts’ estimates of $98.9 billion, according to LSEG data. The company projected full-year 2026 profit of $11.43 to $11.63 per share, compared with analyst expectations of $11.45 per share.

Market Reaction and Ongoing Talc Litigation

The updated outlook arrived a day after a court-appointed special master recommended that expert testimony asserting a link between J&J’s talc products and ovarian cancer be permitted in court proceedings.

“The talc litigation concerns may be driving the stock down slightly,” said RBC Capital Markets analyst Shagun Singh.

In premarket trading, J&J shares were down more than 3%. The stock had gained roughly 43% in 2025.

The company has long contested claims in both federal and state courts that its talc products cause cancer, maintaining that the products are safe.

J.P. Morgan analysts said they are monitoring near-term developments in the litigation but believe the “JNJ story moving beyond talc”.

Fourth-Quarter 2025 Performance and Portfolio Dynamics

J&J also reported fourth-quarter 2025 results that exceeded market expectations, supported by strong demand for key therapies and solid performance in medical devices.

Earnings on an adjusted basis were $6 billion, or $2.46 per share, above analyst estimates of $2.44 per share. Quarterly revenue reached $24.56 billion, exceeding Wall Street expectations of $24.16 billion.

The healthcare conglomerate cited robust performance from blood cancer therapy Darzalex and continued growth from psoriasis treatment Tremfya, alongside resilience in its medical devices business.

“2025 was a catapult year…fueled by the strongest portfolio and pipeline in our history,” Chief Executive Joaquin Duato said in a statement, noting that cancer therapy Carvykti surpassed $1 billion in annual sales for the first time.

Stelara Pressure and Growth in Broader Pharmaceutical Portfolio

J&J is contending with several strategic challenges, including tariff uncertainty related to its medical devices segment and intensifying competition from biosimilars targeting its blockbuster psoriasis drug Stelara. The company said Stelara sales declined more than analysts had anticipated.

“How nice is it that Stelara was down so much – maybe even more than analysts thought – and we still continue to grow?” Wolk said.

“If you just take Stelara out of that mix, that portfolio is growing 14%, 15%. Those are the products that we’re going to rely on for the next couple years and the balance of this decade.”

Segment Performance: Innovative Medicine and Medical Devices

J.P. Morgan analysts characterized the quarterly results as only “modestly” ahead of expectations but said J&J has demonstrated the ability to deliver sustained revenue expansion.

Sales in the Innovative Medicine division, J&J’s largest business, advanced 10% to $15.76 billion, surpassing expectations of $15.37 billion. Revenue in the medical devices unit increased 7.5% to $8.80 billion, topping estimates of $8.69 billion.