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Yesterday, Johnson & Johnson posted results before the US market opened. The company reported better revenue and profit than analysts were expecting, thanks to stronger growth from both the pharmaceutical and medical devices divisions. There isn't a consumer division anymore due to the spin-off of Kenvue in the middle of last year.
The medical devices division grew at 13.3%, partially driven by the unwinding of pent-up demand during Covid lockdowns. This trend is good news for Stryker, our other medical devices holding.
On the pharmaceutical side, sales only grew at 4.2%. The company forecasts that sales will grow 5% to 7% through to 2030. The increases will be fuelled by the launching of at least 20 new therapies. The R&D team is working hard! Management is also optimistic that 10 or more of those therapies can reach peak sales of around $5 billion per year.
The J&J share price won't shoot the lights out, but it is very stable and pays a great and reliable dividend. We also expect to see a healthy re-rating higher of the share price once the talc powder court cases have been settled. At the moment, the legal challenges are a dark cloud over the company, with the possibility that they have to settle for some ridiculous amount. Buy, hold and forget.
