What to Expect When Johnson & Johnson Reports Tuesday

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Johnson & Johnson (NYSE: JNJ) is scheduled to report its most recent quarterly results before the markets open on Tuesday. The consensus estimates are calling for $2.00 in earnings per share (EPS) and $20.09 billion in revenue. The third quarter of last year reportedly had $2.05 in EPS and $20.35 billion in revenue.

Last week, a jury awarded $8 billion in damages to a man accusing Johnson & Johnson of failing to warn about the side effects of one of its antipsychotic drugs. Specifically, the company should have warned that Risperdal could cause young men to grow breasts.

Some are calling this amount excessive, especially since the plaintiff already has been awarded $680,000 in compensatory damages over these claims. The $8 billion award is likely to be greatly reduced.

Some investors are afraid that Johnson & Johnson could now be exposed to more lawsuits over Risperdal, among other pieces of its portfolio, including talcum powder and opioid treatments. According to a recent filing, the company faces some 13,400 lawsuits tied to Risperdal that allege the drug caused a condition called gynecomastia in boys.

The U.S. Food and Drug Administration approved Risperdal in 2002 to treat schizophrenia, but it was not cleared for use in children until 2006.

Overall, Johnson & Johnson has underperformed the broad markets, with the stock up less than 2% year to date. In the past 52 weeks, the stock is down closer to 5%.

A few analysts weighed in ahead of the report:

  • Raymond James has an Outperform rating and a $145 price target.
  • Sanford Bernstein has an Outperform rating with a $155 price target.
  • Morgan Stanley has an Equal Weight rating and a $145 price target.
  • Credit Suisse’s Buy rating comes and a $156 target price.
  • Merrill Lynch has a Hold rating with a $150 target price.
  • Barclays has a Hold rating with a $140 price target.
  • Goldman Sachs has a Buy rating and a $169 price target.

Shares of Johnson & Johnson traded at $130.92 on Monday, in a 52-week range of $121.00 to $148.99. The consensus price target is $149.76.


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