Johnson & Johnson: Awaiting Results
Johnson & Johnson (NYSE: JNJ), one of the global giants in the pharmaceutical, medical device and consumer sectors, is in the spotlight as it prepares to release its fourth-quarter 2024 results. Analysts and the market expect the results to reflect a combination of macroeconomic challenges and strategic opportunities that will define its performance in 2025.
Expected Q4 2024 results
1. Pharmaceuticals: The pharmaceutical business remains the key revenue driver for J&J, driven by drugs such as Stelara (treatment for immune diseases) and Darzalex (multiple myeloma). However, the recent loss of exclusivity for some products could affect revenues, especially in key markets such as the United States and Europe.
o Expected revenues: Moderate growth of 3-5% year-on-year is projected in the pharmaceutical segment.
2. Medical devices: The post-pandemic recovery has favored this segment, with an increase in surgical procedures and advanced therapies. However, supply chain issues and high material costs could limit gains.
3. Consumer products: The consumer division, now under the Kenvue brand, has experienced stable growth thanks to products such as Tylenol and Neutrogena. However, competition in this market remains intense, which could limit profit margins.
Technical analysis with WACD
The company is currently in a price correction that began in September 2024 and has moved since December last year in a range between $150 and $142 a share. Currently there have been bearish signals in the WACD indicator in its WVAP signal that show us that it can correct its price again in that range. On the other hand the smoothed triple mean seems to be extending its move from the recent lows, indicating that this signal could be short-lived and could send the price subsequently towards the high end of the range if the expected results are as indicated.
Outlook for 2025
1. Pharmaceutical innovation: Johnson & Johnson has strengthened its focus on research and development, with a robust pipeline that includes oncology treatments and advanced gene therapies. Expected new drug approvals could be a key catalyst for long-term growth.
2. Legal Challenges: Litigation related to talc and other consumer products continues to be a source of uncertainty. While J&J has established a compensation fund, legal costs could affect its results in 2025.
3. Digital transformation and sustainability: The company is investing in digital technologies to improve operational efficiency and in sustainability initiatives that align its business model with market and regulatory expectations.
Conclusion
Johnson & Johnson faces a mixed picture in the near term, with challenges in some key segments and growth opportunities in others. Fourth quarter 2024 results will be crucial in gauging its ability to overcome current pressures and capitalize on its innovation strategy in 2025.
With a focus on diversification and innovation, J&J remains a benchmark in the healthcare sector, but its success will depend on how it manages legal and macroeconomic risks in the coming years.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Expected Q4 2024 results
1. Pharmaceuticals: The pharmaceutical business remains the key revenue driver for J&J, driven by drugs such as Stelara (treatment for immune diseases) and Darzalex (multiple myeloma). However, the recent loss of exclusivity for some products could affect revenues, especially in key markets such as the United States and Europe.
o Expected revenues: Moderate growth of 3-5% year-on-year is projected in the pharmaceutical segment.
2. Medical devices: The post-pandemic recovery has favored this segment, with an increase in surgical procedures and advanced therapies. However, supply chain issues and high material costs could limit gains.
3. Consumer products: The consumer division, now under the Kenvue brand, has experienced stable growth thanks to products such as Tylenol and Neutrogena. However, competition in this market remains intense, which could limit profit margins.
Technical analysis with WACD
The company is currently in a price correction that began in September 2024 and has moved since December last year in a range between $150 and $142 a share. Currently there have been bearish signals in the WACD indicator in its WVAP signal that show us that it can correct its price again in that range. On the other hand the smoothed triple mean seems to be extending its move from the recent lows, indicating that this signal could be short-lived and could send the price subsequently towards the high end of the range if the expected results are as indicated.
Outlook for 2025
1. Pharmaceutical innovation: Johnson & Johnson has strengthened its focus on research and development, with a robust pipeline that includes oncology treatments and advanced gene therapies. Expected new drug approvals could be a key catalyst for long-term growth.
2. Legal Challenges: Litigation related to talc and other consumer products continues to be a source of uncertainty. While J&J has established a compensation fund, legal costs could affect its results in 2025.
3. Digital transformation and sustainability: The company is investing in digital technologies to improve operational efficiency and in sustainability initiatives that align its business model with market and regulatory expectations.
Conclusion
Johnson & Johnson faces a mixed picture in the near term, with challenges in some key segments and growth opportunities in others. Fourth quarter 2024 results will be crucial in gauging its ability to overcome current pressures and capitalize on its innovation strategy in 2025.
With a focus on diversification and innovation, J&J remains a benchmark in the healthcare sector, but its success will depend on how it manages legal and macroeconomic risks in the coming years.
Ion Jauregui - ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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