Johnson & Johnson’s revenue estimates
Analysts expect a rise of 2.6% in Johnson & Johnson’s (JNJ) 2Q17 revenue to ~$19.0 billion. This growth is expected to be driven by the strong performances of some of JNJ’s key products, including Xarelto, Zytiga, Remicade, Stelara, and Olysio, and it’s expected to be partially offset by the negative impact of foreign exchange.
The chart above shows Johnson & Johnson’s actual revenues over the last few quarters and analysts’ estimates for 2Q17. There are various factors supporting analysts’ expectations for JNJ’s future revenue, which we’ll discuss later in this series.
Segment-wise expectations for 2Q17
Johnson & Johnson’s business is divided into three segments:
- Medical Devices and Diagnostics
- Consumer Healthcare
The Pharmaceuticals segment contributes ~47% of JNJ’s total revenue. The segment is expected to report operational growth in 2Q17, considering its strong portfolio of oncology and immunology products. However, the expected lower sales of hepatitis C products and Invega are expected to partially offset the segment’s growth during 2Q17.
The Medical Devices segment contributes ~35% of JNJ’s total revenue. The segment is expected to report operational growth in 2Q17, driven by the strong performances of its advanced surgery, orthopedics, cardiovascular, and vision care franchises, partially offset by the lower sales of its diabetes care products.
The Consumer Healthcare segment contributes ~18% of JNJ’s total revenue. JNJ acquired NeoStrata Company for its skincare products franchise in April 2016. The segment’s 2Q17 revenue is expected to be driven by over-the-counter products and beauty products, while the lower sales of its baby care products, oral care products, women’s health products, and wound care products are expected to offset growth.
The key products mentioned above will be discussed separately in the coming articles. To divest risk, investors may want to consider ETFs such as the iShares US Healthcare ETF (IYH), which holds 10.8% of its total assets in Johnson & Johnson. IYH also holds 6.8% in Pfizer (PFE), 6.2% in Merck & Co. (MRK), and 3.2% in Allergan (AGN).