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Johnson & Johnson JNJ

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

J&J Posts Strong Q2, Buoyed by Reversal of COVID-19 Pandemic Trends Lifting Medical Device Sales

Damien Conover, CFA Sector Director

Analyst Note

| Damien Conover, CFA |

Johnson & Johnson reported strong second-quarter results ahead of our expectations, and we plan to slightly increase our fair value estimate based on the outperformance. While destocking in the prior-year period helped drive growth in the quarter (especially in medical devices), the increase from prepandemic 2019 levels shows steady overall growth. J&J continues to innovate across segments, adding support to its wide moat.

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Company Profile

Business Description

Johnson & Johnson is the world's largest and most diverse healthcare firm. Three divisions make up the firm: pharmaceutical, medical devices and diagnostics, and consumer. The drug and device groups represent close to 80% of sales and drive the majority of cash flows for the firm. The drug division focuses on the following therapeutic areas: immunology, oncology, neurology, pulmonary, cardiology, and metabolic diseases. The device segment focuses on orthopedics, surgery tools, vision care, and a few smaller areas. The last segment of consumer focuses on baby care, beauty, oral care, over-the-counter drugs, and women’s health. Geographically, just over half of total sales are generated in the United States.

Contact
One Johnson and Johnson Plaza
New Brunswick, NJ, 08933
T +1 732 524-0400
Sector Healthcare
Industry Drug Manufacturers - General
Most Recent Earnings Mar 31, 2021
Fiscal Year End Jan 3, 2022
Stock Type Slow Growth
Employees 136,400

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