Johnson & Johnson raises full-year guidance as oncology growth offsets biosimilar pressure
Analysts at 24/7 Wall St. assign a buy rating with a $252.01 price target, citing strong performance in cancer drugs and a planned separation of the Orthopaedics business.
Johnson & Johnson has reported first-quarter 2026 results that exceeded market expectations, with revenue rising 9.9 per cent year-on-year to $24.06 billion. Adjusted earnings per share reached $2.70, marking the fourth consecutive quarter of beating consensus estimates. The company subsequently raised its full-year revenue guidance to between $100.3 billion and $101.3 billion, while lifting adjusted EPS guidance to between $11.45 and $11.65.
Innovative Medicine revenue grew 11.2 per cent, driven by strong performances from key products. DARZALEX generated $3.96 billion in sales, while TREMFYA surged 68.3 per cent. Oncology drugs also showed significant momentum, with CARVYKTI sales jumping 62.1 per cent to $597 million and RYBREVANT/LAZCLUZE increasing by 82.7 per cent. These gains helped offset a 59.7 per cent decline in STELARA sales, which faced pressure from biosimilar competition.
Despite the top-line growth, reported net income dropped 52.4 per cent and free cash flow fell 55.42 per cent in the quarter. Management attributed these declines largely to a one-time $330 million litigation charge and working capital timing, noting that gross profit actually rose 9.77 per cent. The company also highlighted the launch of ICOTYDE for psoriasis and the expansion of its cell therapy facility in Pennsylvania as part of its broader growth strategy.
Investor sentiment appears to be shifting towards defensive healthcare stocks, with Johnson & Johnson shares closing at $230.42, up 2.58 per cent for the week. The stock has risen 59.53 per cent over the past twelve months. Insider activity also provided a signal of confidence, with R&D chief John Reed purchasing 25,255 shares on 1 May 2026.
Analysts at 24/7 Wall St. have assigned a buy recommendation with a 12-month price target of $252.01, implying approximately 9.37 per cent upside. The bullish case rests on the strength of the oncology pipeline and the planned separation of the Orthopaedics business, which could unlock a sum-of-the-parts rerating. However, risks remain regarding talc-related liabilities and the pace of biosimilar erosion across the legacy portfolio.
