Johnson & Johnson Reports Largely In-Line Quarter With Broad Support Across Key Business Segments

Johnson & Johnson reported third-quarter results largely in line with our projections, and we don't expect major changes to our fair value estimate. We continue to see the firm as fairly valued, with the market outlook similar to our view. While inflation seems to slightly pressure J&J's costs (as shown by a 50-basis-point reduction to 2022 margin guidance), we don't expect a material headwind to earnings from increasing inflationary pressure, given J&J's relatively low production cost and ability to pass along price increases. We view the strong pricing power as reflective of J&J's innovative products and brand power, which also support the firm's wide moat.