What to Look for in Johnson & Johnson Earnings

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Johnson & Johnson (NYSE: JNJ) is set to release its second-quarter earnings report before the markets open on Tuesday. With a diverse product base and a very popular and solid brand, this is among the most conservative big pharmaceutical plays. It is one the top market cap stocks in the health care sector.

The consensus estimates from Thomson Reuters are $1.68 in earnings per share (EPS) on revenue of $17.98 billion. In the same period of last year, it posted EPS of $1.71 and $17.79 billion in revenue.

Earlier in June, Johnson & Johnson presented stunning CASTOR data that should continue to drive rapid Darzalex uptake. Perhaps the most impressive data Credit Suisse saw all weekend was from the CASTOR Study for Darzalex in multiple myeloma. The study showed a 61% reduction in the risk of disease progression or death with Darzalex in combination with Velcade and dexamethasone that increased to a 69% reduction in patients who had received just one prior line of therapy. This data should help further accelerate Darzalex’s uptake in various combinations and in earlier lines of therapy in multiple myeloma.

The company announced at the beginning of June that it entered into a definitive agreement to acquire Vogue, a privately held company focused on the marketing, development and distribution of salon-influenced and nature-inspired hair care and other personal care products, for roughly $3.3 billion in cash. This acquisition will include the OGX collection of shampoos, conditioners, treatments, styling products, body care and bath products, the FX line of hair styling products and the Proganix and Maui Moisture hair care lines.

The first quarter of 2016 saw a total of $2.389 billion spent on buybacks, out of $5.481 billion in the trailing 12 months, ending March 31.

Prior to the release of the earnings report, a few analysts weighed in on the stock:

  • Jefferies has a Hold rating with a $113 price target.
  • Wells Fargo reiterated a Buy rating.
  • Barclays reiterated an Overweight rating with a $125 price target.
  • Goldman Sachs has a Neutral rating with a $121 price target.
  • BTIG Research reiterated a Neutral rating.
  • Leerink Swann reiterated a Buy rating.
  • Raymond James reiterated an Outperform rating with a $120 price target.
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So far in 2016, Johnson & Johnson has outperformed the broad markets with the stock up about 21%. Over the past 52 weeks, the stock has gained about 25%.

Shares were trading down 0.3% at $122.59 Monday morning, with a consensus analyst price target of $120.33 and a 52-week trading range of $81.79 to $124.30.