JNJ Stock Slid 5.7% After Q3 Earnings Beat as MedTech Sales Missed

JNJ stock fell 5.7% in Tuesday trading to close at $248.61, its worst session since April 2025, after Johnson & Johnson beat Wall Street’s profit and sales estimates for the third quarter but missed again on its medical devices business. The 16.6 million shares that changed hands were the heaviest in months, and the selloff pulled rival device makers down with it, with Boston Scientific off nearly 3% and Intuitive Surgical down about 2%.

The headline numbers looked fine. Adjusted earnings per share of $2.59 topped the $2.53 analysts had expected, according to LSEG data cited by CNBC, and revenue of $25.4 billion came in just above the $25.28 billion estimate. That beats typically lift a defensive stock like Johnson & Johnson. The problem was where the growth came from.

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Johnson & Johnson’s medical technology unit delivered $8.6 billion in sales, up 2.5% but short of the $8.71 billion Wall Street had penciled in. It was the second consecutive quarter the MedTech arm missed, and the miss was concentrated where the company had promised improvement. Cardiovascular sales disappointed again, and its surgery business faced pressure abroad in the Middle East and China, with executives describing the losses as deferred sales rather than lost revenue, per the analyst call reported by CNBC.

"Our performance is below the standard we have set internally and below the expectations we previously communicated to investors," Tim Schmid, the head of the medical technology unit, said on the call.

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The other half of the quarter sharpened the contrast. Innovative Medicine, the pharma side, kept growing, with oncology revenue up 16% to $7.6 billion and neuroscience sales up 17%. The newly launched Icotyde, an oral psoriasis drug approved by the FDA in March, has now been started by more than 20,000 patients, double July’s count, with nearly 9,000 doctors prescribing it. Tremfya, the blockbuster inflammatory-disease drug, grew 68%.

The accounting picture muddied things further. Adjusted earnings fell 7.5% from a year earlier, and reported GAAP profit collapsed to $210 million, down 95.9%, pulled by one-time items including the proposed $5.5 billion talc settlement and charges tied to the Firefly Bio acquisition and a Sail Biomedicines collaboration. Management framed those as non-recurring, but a reported EPS of $0.09 is the sort of headline income investors notice.

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Even after the slide, the outlook points up. The company raised its full-year adjusted EPS forecast to $11.05 to $11.15, a new midpoint of $11.10, and lifted its reported sales view to roughly $101.2 billion at the midpoint. That would mark the first $100 billion revenue year in the company’s 140-year history, a milestone Chief Financial Officer Joe Wolk highlighted on the call.

The tension is the one that drove the shares down Tuesday: revenue growing while earnings compress, and the growth concentrated in the pharma unit that already draws a premium valuation. JNJ now trades at roughly 22 times forward earnings versus 17 for the NYSE Arca Pharmaceutical Index, according to FactSet figures cited by CNBC, so investors paid a higher multiple for a business whose medtech engine keeps missing. That gap is why the market focused on the miss rather than the beat.

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The next catalysts are dated. Johnson & Johnson has an investor day scheduled for Dec. 8, where executives are expected to lay out the pipeline and the MedTech turnaround plan. In the meantime, the street will be watching whether the surgery weakness in the Middle East and China really is just deferred demand, and whether Icotyde keeps adding patients in a way that offsets it.

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