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JNJ's strong Q3 sales prompt RBC to increase stock price target

EditorIsmeta Mujdragic
Published 10/16/2024, 09:54 AM
JNJ
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On Wednesday, RBC Capital Markets adjusted its price target for Johnson & Johnson (NYSE:JNJ), increasing it from $178.00 to $181.00 while maintaining an Outperform rating on the stock. This change comes after the healthcare giant reported third-quarter earnings that surpassed market expectations, prompting a roughly 2% rise in its share price on the same day.

Johnson & Johnson's third-quarter results showcased a year-over-year underlying growth of 5.6%, excluding Covid-related sales, which outperformed forecasts. This growth was primarily attributed to the company's Innovative Medicine sector.

However, the MedTech segment experienced a slower growth rate of 3.7% compared to the 6.7% growth anticipated, influenced by typical seasonal patterns and challenges in the Asia Pacific region.

The firm's analysis suggests that Johnson & Johnson is on a steady path of operational advancement, with strategic moves to enhance pipeline execution beginning to materialize. The analyst's commentary highlighted the company's solid performance and the belief in its continued progress.

Johnson & Johnson's financial results and subsequent stock performance have reinforced RBC Capital's positive outlook on the company. With the price target increase to $181, the firm signals its confidence in Johnson & Johnson's prospects and its ability to maintain a strong operational trajectory.

In other recent news, Johnson & Johnson (J&J) has been ordered to pay $15 million in a talc cancer case. The Connecticut jury ruled in favor of plaintiff Evan Plotkin, who alleged that his mesothelioma was caused by long-term use of J&J's talc powder. The company plans to appeal the decision, maintaining the safety of its talc products.

This legal development comes as J&J is trying to settle over 62,000 claims linking its talc products to various cancers.

On a brighter note, J&J reported robust third-quarter results, with operational sales growth of 6.3% reaching $22.5 billion. The company raised its full-year guidance for the third consecutive quarter, despite facing challenges in certain markets. The Innovative Medicine segment showed particular strength, with sales exceeding $14 billion for two consecutive quarters.

Stifel financial analysts have raised their price target for J&J to $170 from the previous $160, maintaining a Hold rating on the stock. This revision follows J&J's strong third-quarter performance, which surpassed both Stifel's and consensus estimates.

These are among the recent developments for J&J.

InvestingPro Insights

Following RBC Capital Markets' positive outlook on Johnson & Johnson (NYSE:JNJ), recent data from InvestingPro provides additional context to the company's financial health and market position. JNJ's market capitalization stands at a robust $395.03 billion, underscoring its status as a major player in the healthcare sector. The company's revenue for the last twelve months reached $87.7 billion, with a notable revenue growth of 4.77% over the same period, aligning with the operational advancements highlighted in the article.

InvestingPro Tips reveal that Johnson & Johnson has raised its dividend for an impressive 54 consecutive years, demonstrating a strong commitment to shareholder returns. This consistency in dividend growth, coupled with a current dividend yield of 3.02%, may appeal to income-focused investors. Additionally, the company's stock is trading near its 52-week high, with a price that is 97.19% of its peak, potentially reflecting market confidence in JNJ's recent performance and future prospects.

For investors seeking a deeper understanding of Johnson & Johnson's valuation and growth potential, InvestingPro offers 11 additional tips and a comprehensive set of financial metrics. These insights can provide valuable context to RBC Capital's price target increase and the company's recent earnings beat.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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