Johnson & Johnson Tops Q3 Estimates, Analyst Says Guidance Cut Less Than Anticipated

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By Senad Karaahmetovic

Shares of Johnson & Johnson (NYSE:JNJ) are up nearly 2% after the pharmaceutical giant reported better-than-expected Q3 results.

JNJ reported an EPS of $2.55 on revenue of $23.79 billion to top the average analyst estimate of $2.52 on revenue of $23.46 billion. Sales rose +1.9%, modestly helped by the higher-than-expected COVID-19 vaccine sales.

Pharmaceutical sales were up +2.6% YoY to $13.21 billion, slightly below the estimate of $13.3 billion. MedTech sales rose +2.1% to $6.78 billion.

On the guidance front, JNJ maintained 2022 full-year guidance midpoints for adjusted operational sales and reported adjusted EPS. However, JNJ now sees full-year revenue between $93 billion to $93.5 billion, down from the prior outlook of $93.3 billion to $94.3 billion. Bloomberg consensus stood at $95.06 billion.

The adjusted EPS is now seen between $10.02 and $10.07, up from the prior range of $10.00 to $10.10.

"All segments (Pharma, Medtech, and Consumer) came in ahead of expectations for3Q and the guidance cut from F/X was less than we anticipated, hence we see JNJ shares slightly up this morning," Morgan Stanley analysts wrote to clients in a note.

Cantor Fitzgerald analysts reiterated the Overweight rating and a 12-month $215 price target for JNJ shares.

"We continue to believe that upward earnings estimate revisions and multiple expansion, to 17-20x 2022E EV/EBIT from 15x now, driven by above-market growth in its key franchises, should likely move JNJ shares higher," the analysts wrote.