On Wednesday, RBC Capital Markets adjusted its outlook on Johnson & Johnson (NYSE:JNJ), reducing the price target to $175 from the previous $181 while sustaining an Outperform rating on the stock.
Following the company's first-quarter results for 2024, which showcased sales in line with expectations and an earnings per share (EPS) beat, Johnson & Johnson's shares experienced a slight decline. The healthcare giant also refined its full-year 2024 operational guidance, increasing the midpoint estimates.
The company reported solid underlying utilization trends, with its Pharmaceutical segment, excluding Covid adjustments, showing an 8.3% year-over-year operational sales increase, and its Medical Technology segment posting a 6.5% growth from the previous year.
These figures indicate that the company's fundamentals remain robust, with stable to improving stacked two-year growth rates.
Johnson & Johnson anticipates that Medical Technology utilization trends will continue to be favorable for the remainder of the year. However, it also forecasts that the Innovative Medicine segment might face lighter performance in the second half of 2024 due to the expected competition from Stelara biosimilars in Europe. Despite these challenges, RBC Capital Markets has decided to keep its Outperform rating for Johnson & Johnson.
InvestingPro Insights
Johnson & Johnson (NYSE:JNJ) continues to demonstrate resilience in its market performance. According to real-time data from InvestingPro, the company's market capitalization stands strong at $348.09 billion. Investors may find comfort in the company's solid gross profit margin, which was reported to be 69.18% for the last twelve months as of Q1 2023, indicating efficient operations and robust profitability. Furthermore, the company's operating income margin during the same period was a healthy 27.79%, showcasing its ability to convert revenues into actual profit.
From an investment standpoint, Johnson & Johnson's long history of dividend reliability is noteworthy, with the company having raised its dividend for 53 consecutive years, and maintaining payments for 54 years. This consistency is a testament to its financial strength and commitment to shareholders, a factor that may appeal to income-focused investors. Additionally, the company's dividend yield as of the latest data stood at 3.14%, supported by a dividend growth of 5.31% over the last twelve months as of Q1 2023.
For those considering an investment, Johnson & Johnson is currently trading near its 52-week low, and with an InvestingPro fair value estimate of $172.06, there could be potential for upside. For more detailed analysis and additional InvestingPro Tips, such as the company's aggressive share buybacks and its low price volatility, investors can explore further with a subscription to InvestingPro. Using the coupon code PRONEWS24, readers can receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to a total of 13 InvestingPro Tips that could further inform investment decisions.
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