Healthcare giant Johnson & Johnson (JNJ) is gearing up to release its fourth-quarter 2024 financials on January 22. Wall Street analysts expect the company to report earnings of $2 per share, representing a 13% decrease year-over-year. In contrast, revenues are expected to grow by 5% from the year-ago quarter to $22.45 billion, according to data from TipRanks.
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The decline in Q4 profits could be due to increasing costs from legal cases and acquisitions, an unfavorable product mix, and narrowing margins.
Analyst Maintains Hold Rating amid Legal Worries
Ahead of JNJ’s earnings announcement, Tim Anderson from Bank of America Securities has maintained a Hold rating on Johnson & Johnson with a $160 price target.
The analyst remains worried about the Varipulse product withdrawal and its potential impact on sales. Also, uncertainties about the talc litigation outcome and ongoing clinical trial results remain concerns.
Recent Event Ahead of Q4 Earnings
Johnson & Johnson recently announced a $14.6 billion agreement to acquire Intra-Cellular Therapies, aiming to strengthen its neuroscience portfolio.
Following the news, Wells Fargo analyst Larry Biegelsen gave Johnson & Johnson a Hold rating, citing concerns about the deal. While the acquisition could boost JNJ’s Neuroscience segment, it is expected to slightly reduce earnings in the first year. Additionally, financial risks like increased debt and potential effects on JNJ’s credit rating add to the cautious outlook.
Options Traders Anticipate a Minor Move
Using TipRanks’ Options tool, we can gauge options traders’ expectations for the stock post-earnings report. Based on a $142 strike price, with call options priced at $5.53 and put options at $0.35, the expected price movement, based on the at-the-money straddle is 2.63%.
Is Johnson & Johnson a Good Stock to Buy?
Turning to Wall Street, Johnson & Johnson stock has a Moderate Buy consensus rating based on three Buys and six Holds assigned in the last three months. At $167.88, the average JNJ price target implies 14.18% upside potential. Shares of the company have lost 6.6% in the past six months.
