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- JNJ 3Q25 - Raising forecasts and spinning business units. What's next? Bull case $245 Bear case $145
JNJ 3Q25 - Raising forecasts and spinning business units. What's next? Bull case $245 Bear case $145
Cheat Sheets presented by stocktwits
JOHNSON & JOHNSON (JNJ)
🏥 Healthcare Giant | Made $24B, EPS Beat, Darzalex Hit $3B+, Guiding Higher
Q3 2025: Beat By $240M | Net Income Up 91% | Darzalex/Carvykti Crushing It | Raised Guidance
💰 Market Cap: $460B | 🏢 Employees: 138,100 | 🌍 Global Healthcare Leader
👨💼 CEO Joaquin Duato | 🎯 Pharma + MedTech | 💊 139 Years Old (Founded 1886)
$187
📉 -$3.56 (-1.86%) Today
+33% YTD
Price Target Scenarios
18-Month Horizon (Mid-2027 Targets) - Based on Current Price $187
$245
Bull Case (+31%)
Pharma Pipeline Wins
Growth Accelerates
📊 Math:
If J&J earns $13/share in 2027 × 19x = $245
🚀 What Needs To Happen:
Darzalex keeps 50%+ share, +15% • Carvykti hits $5B peak • Tremfya hits $10B+ • New $5B drugs work (icotrokinra, In Lexo, Rybrevant) • MedTech 7-8% post-spin • China recovers • Talc ruling favorable (Q1 2026) • Pipeline delivers • Margins 32%+ • Market pays 19-20x (vs 18x) • CFO's 2026 5%+ growth hits
$210
Base Case (+12%)
Steady Growth
Pipeline Delivers
📊 Math:
If J&J earns $12/share in 2027 × 17.5x = $210
⚖️ What Needs To Happen:
Revenue 5-6%/yr (CFO: 2026 exceeds 5%) • Stelara managed - Tremfya +40% w/ 50% IL-23 share • Darzalex holds 50% • Carvykti $2-3B (tracking to $5B) • New approvals (In Lexo, icotrokinra) • MedTech 5-6% • Ortho spin smooth (18-24mo) • China stable • Legal costs OK • EPS 7-8%/yr • Margins 30-31% • Market 17-18x
$145
Bear Case (-23%)
Pipeline Fails
Legal Nightmares
📊 Math:
If J&J earns $9.50/share in 2027 × 15x = $145
🔻 What Could Go Wrong:
Stelara cliff faster than Tremfya ramps • Tremfya 40% not sustainable - biosimilar IL-23s hit • Darzalex competition (Bristol Myers, Sanofi) • Carvykti mfg bottlenecks = $3B not $5B • Pipeline fails (In Lexo, icotrokinra face rivals) • MedTech stalls 2-3% • China stays weak • Talc unfavorable = $20B+ • Medicare cuts • Ortho spin disaster • Margins 26-28% • Market 14-15x • CFO's 5%+ miss = $145 (-23%)
Bottom Line for Retail Investors
💊
Cancer = Money Printer
Darzalex $3B (50% share). Carvykti 8,500 patients, $5B peak. Oncology $5.4B (+20%). Rybrevant +122%, $5B peak. In Lexo $5B peak. Lifesaving drugs = unlimited pricing power.
📈
Ex-Stelara = 16% Growth!
$24B (beat $240M). EPS $2.80 (beat 4¢). Ex-Stelara: pharma +16% on $50B+ base. 4 straight beats. Raised to $93.7B. CFO: 2026 consensus too low. Blue chip quality.
🛡️
Dividend Aristocrat
$1.30 quarterly ($5.20/yr). 63yrs growth. 2.7% yield. Growing 5%/yr. Healthcare = recession-proof. People always need meds.
⚖️
Stelara Cliff BUT Tremfya Works
Stelara down 42% losing $11B. BUT Tremfya +40%, captured 50% IL-23 share. CEO: "BIGGER and BETTER than Stelara, $10B+." Bears: "too slow." Bulls: "40% growth proves it's working." Talc risk but expect favorable ruling Q1 2026. Stock at 18x = skeptical. Execution will prove bulls right.
📊 Bottom Line: Ex-Stelara = 16% Growth!
$24B (beat $240M) • EPS $2.80 (beat 4¢) • Ex-Stelara Pharma +16%! • Darzalex $3B+ • Carvykti +81% (8,500 pts) • Tremfya +40% • MedTech $8.4B • CFO: "2026 will exceed 5%" • 4th Beat 💪
💰
$24.0B
Q3 2025 Revenue
+6.8% YoY
⚡
$3B+
Darzalex Sales
Record Quarter
🎯
$2.80
Adj EPS Q3
+16% YoY
🚀
$93.7B
2025 Guidance
Raised Again
📞 Key Q3 2025 Earnings Call Highlights
💊
Darzalex Dominating
$3B+ quarter. 50%+ market share = GOLD STANDARD. Share gains +5.7pts (frontline +9pts). CEO: "No other company has our multiple myeloma expertise." New combo studies launching.
🧬
Carvykti Exploding
$524M, +81%. Treated 8,500+ patients = most successful CAR-T ever. CEO confirmed $5B peak sales. Sequential +18.5%. Manufacturing doubled. Still supply constrained = years of runway.
🏥
MedTech Accelerating
$8.4B, +5.6%. Ortho back to growth: Hips +5.1%, Knees +5.6%. EP growth doubled. Vision IOLs +14%. Shockwave = 1M patients. Otava filing H1 2026. Spinoff = +75-100bps margins.
⚡
Tremfya Replacing Stelara
+40% growth. Captured 50% of IL-23 starts in UC in ONE YEAR. CEO: "could be BIGGER and BETTER than Stelara. Confident will hit $10B+." 75% of Stelara's $11B was IBD. Tremfya taking it all.
📍 CEO Duato: "J&J in POWERFUL NEW ERA OF GROWTH." Ex-Stelara = pharma up 16%. 90% of business grew 16%. Double digits across 11 brands. "Momentum building, impact ACCELERATING."
💰 CFO Wolk: "2026 consensus 4.6% TOO LOW - will EXCEED 5%." EPS has "$0.05 upside" vs $11.39 consensus. "Don't need large M&A to hit high end of targets." 60+ small deals in 18 months (In Lexo: $200M → $5B).
🎯 FIVE $5B+ Assets: (1) Carvykti $5B (2) In Lexo $5B+ (3) Rybrevant/Lazcluze $5B (4) Icotrokinra $5B (5) Caplyta $5B. Plus Tremfya $10B+ = $35B+ NEW revenue coming.
🧪 Pharma Chief: Spravato: 180K patients, +61%. In Lexo: 50%+ cancer-free at 1yr. 600K bladder cancer patients yearly = huge TAM. TAR-210: 90%+ response, 3-month release.
🔮 Legal/Mfg: Talc Daubert rulings expected Q1 2026. $55B US investment next 4yrs. All US meds made in US. Ortho spin: 18-24 months. MedTech margins +75-100bps post-spin.
🚀 Why JNJ Bulls Are Right
💊
Oncology = Pricing Power
CEO: "No other company has our MM expertise." Darzalex 50% share, $3B/qtr. Carvykti 8,500 patients, $5B peak. Rybrevant +122%, $5B peak. In Lexo $5B peak (bought for $200M!). Oncology $5.4B/qtr, +20%. Cancer drugs = unlimited pricing. This segment alone worth $150+ stock.
⚡
Tremfya > Stelara
+40% growth. Captured 50% IL-23 starts in UC in 1 year. CEO: "could be BIGGER and BETTER than Stelara. $10B+ confident." 75% of Stelara's $11B was IBD. Tremfya replacing ALL of it. Better drug, cleaner profile. Market way underestimating. Bulls right: replacement ON TRACK.
🏥
MedTech = Steady Cash
$8.4B/qtr. Cardiovascular (Abiomed, Shockwave). Surgery tools. Vision IOLs +14%. Ortho spin unlocks $15B+ value. MedTech grows 5-7%/yr forever. People always need devices. Predictable cash flow.
🚀
Street Underestimating
CFO: "2026 consensus 4.6% TOO LOW - will EXCEED 5%." EPS $11.39 has "$0.05 upside." Beat coming. "Don't need large M&A." Ex-Stelara +16%. Beat 4 qtrs straight. CEO: "accelerated growth for balance of decade." Market at 18x trough earnings. Pipeline = easy 20x = $240.
🐻 Why JNJ Bears Have Valid Concerns
📉
Stelara Cliff Risk
Losing $11B Stelara FAST. Tremfya's 40% growth can't continue. Biosimilar IL-23s coming. Takes years to replace $11B. If Tremfya disappoints, whole thesis breaks. Patent cliffs KILL pharma stocks. Stock flat on great earnings = market doesn't believe replacement story yet.
⚖️
Legal = $20B+ Risk
Talc lawsuits = billions at stake. Already paid $10B+. More coming. Each trial loss = $50-500M × thousands of cases. Opioid ongoing. Device failures. One massive verdict wipes out year of growth. This risk never ends. Stock deserves discount.
💸
Pipeline = Execution Risk
Bulls assume pipeline succeeds. What if trials fail? Icotrokinra competes with 15 IL-23 drugs. Darzalex faces Bristol Myers, Sanofi. Carvykti vs Yescarta, Breyanzi. Manufacturing issues = growth killed. One failure = -10% stock. Pharma success rate = 10%. Assuming everything works = naive.
⚠️
Valuation Not Cheap
18x forward on 5-6% growth = EXPENSIVE. Medicare price cuts coming. Part D hurting. China weak. Ortho spin = costs. If growth slows to 3-4%, deserves 15x = $165 (-15%). Bears: "paying too much for mature pharma with declining blockbuster." One miss = $170.
This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial advisor before making investment decisions.
