Johnson & Johnson Lifts 2025 Outlook

Johnson & Johnson (NYSE:JNJ) reported Q2 2025 earnings on July 16, 2025, posting sales of $23.7 billion (up 4.6%), with adjusted EPS of $2.77 and net earnings of $5.5 billion. Management raised full-year 2025 sales guidance by $2 billion and adjusted EPS guidance by $0.25, citing robust operational momentum across innovative medicine and medtech.

The following insights examine how strategic execution, diversified growth drivers, and pipeline achievements are shaping the company's long-term investment profile.

J&J Saw Outperformance in Core Businesses Amid Stelara Headwinds

Despite a 43.2% year-over-year revenue decline for Stelara from biosimilar competition, innovative medicine sales rose 3.8% operationally, with 13 brands achieving double-digit percentage growth, and medtech delivered 6.1% operational sales growth, led by a 22% surge in cardiovascular segment sales. The Stelara loss of exclusivity reduced top-line growth by approximately 710 basis points, yet U.S. pharmaceutical sales rose 7.6%, evidencing significant resilience across diversified revenue streams.

"Importantly, if you take a look at the 90% of our business that is not STELARA, we actually had extraordinarily robust growth of 15.5% growth, really demonstrating the strength across our portfolio. We had 13 brands that were growing double digits. And as we take a look at those, they are -- the vast majority of those are not only our growth drivers for today and tomorrow, but are also key growth drivers out through the end of the decade."
— Jennifer Taubert, Executive Vice President, Worldwide Chairman, Innovative Medicine

Demonstrated double-digit growth for 13 brands and 15.5% growth for 90% of the business, excluding Stelara, despite a major patent expiration, underscores Johnson & Johnson’s exceptional ability to weather exclusivity losses and sustain long-term earnings power.

Strategic Oncology Ambitions and Differentiated Product Innovations Contributed to Growth

The oncology franchise achieved 22.3% growth, with multiple myeloma alone representing a portfolio where approximately 80% of patients receive a Johnson & Johnson product at some stage. Management reiterated a bold target: becoming the global leader in oncology by 2030 with projected sales exceeding $50 billion annually, exceeding current consensus levels by at least threefold in some product categories such as TAR-200 for bladder cancer, based on internal company forecasts for 2028.

"You mentioned TAR-200. That is probably the asset that has the biggest disconnect between our internal forecasts and what the Street expects. We're really excited for this product and to be launching it in the second half of the year. with the ability to truly transform the treatment."
— Jennifer Taubert, Executive Vice President, Worldwide Chairman, Innovative Medicine

Upside potential from underappreciated assets like TAR-200, coupled with leading positions in multiple cancer subsegments, positions Johnson & Johnson to re-rate as a top-tier oncology growth platform with outsized contribution to long-term returns if execution matches internal forecasts.

MedTech Acceleration Is Driven by Cardiovascular and Pipeline Progress

Medtech’s 22% sales growth in the cardiovascular segment -- fueled by recent acquisitions (Abiomed and Shockwave) -- enabled the segment to achieve sequential improvement from Q1 2025 and maintained its position as the fastest-growing company in the cardiovascular medtech space. The electrophysiology business, with a $5 billion sales base and 9.8% growth, benefited from strong physician adoption, global case expansion, and next-generation product introductions, consolidating competitive leadership.

"We've now surpassed 10,000 cases globally with a reported neurovascular event rate of below 0.5. This is well below what we observed in the ADMIRE IDE trial and consistent with published rates across other competitive PFA platforms."
— Tim Schmid, Executive Vice President, Worldwide Chairman, MedTech

Superior real-world clinical outcomes, rapid global uptake, and an innovation pipeline in Medtech -- specifically electrophysiology -- solidify a sustainable competitive edge that has the potential to drive above-market growth rates and margin improvement in the coming years.

Looking Ahead

Management guided to full-year 2025 sales growth of 5.1%-5.6%, raised the midpoint of reported sales guidance to $93.4 billion (5.4% growth), and increased adjusted EPS guidance to $10.80-$10.90. The company expects key pipeline catalysts in the second half of 2025, including approvals/launches for TAR-200 in bladder cancer, subcutaneous RYBREVANT for lung cancer, new TREMFYA indications, and continued clinical trial progress for the OTTAVA robotic surgical system. No additional quantitative long-term (2026 and beyond) financial guidance was disclosed, but acceleration in both innovative medicine and medtech growth is expected in the second half of 2025 versus the first half.

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This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.