Johnson & Johnson Stock: Buy Before Earnings?

Johnson & Johnson's Q2 earnings are due on July 16. The stock is up 8% YTD and has a market cap of $380 billion. Investors may look for initiatives to reduce tariff risk, such as moving production to the US. The stock trades at a low P/E multiple of 17, which is lower than the S&P 500 average. A strong earnings report could lift the stock's value.

Johnson & Johnson (JNJ) is set to report its second-quarter earnings on July 16, with investors closely watching for updates on tariff-related developments and growth opportunities. The healthcare giant has seen its stock rise by over 8% year-to-date (YTD), with a market capitalization of approximately $380 billion. The company's stock trades at a price-to-earnings (P/E) multiple of 17, which is lower than the S&P 500 average of nearly 25.

Investors are particularly interested in any initiatives that Johnson & Johnson may announce to reduce its exposure to U.S. President Donald Trump's proposed 200% tariffs on pharmaceuticals. The company has previously estimated that it could face a $400 million hit due to tariffs this year, largely impacting its medtech business. Moving more production to the U.S. could potentially mitigate this risk and win over investors.

In addition to tariff concerns, investors will be looking at Johnson & Johnson's overall growth prospects. The company's sales were up by a little over 2% in the first quarter of 2025, with strong growth in the U.S. market offsetting a struggling international market. The approval of its nasal spray for depression, Spravato, earlier this year could bring in $5 billion in annual revenue at its peak. However, the stock faces uncertainty due to the loss of patent protection on top-selling drug Stelara and ongoing talc lawsuits.

Despite these challenges, Johnson & Johnson remains a stable dividend growth stock with a 3.4% yield. Its low P/E multiple suggests that it is fairly priced relative to its earnings. While a strong earnings report could lift the stock's value, investors should remain cautious about the risks associated with the company's legal challenges and tariff exposure.

In conclusion, Johnson & Johnson's Q2 earnings report will provide important insights into the company's growth and risk management strategies. Investors should closely monitor the announcement for any updates on tariff initiatives and assess the company's overall performance.

References:
[1] https://finviz.com/news/103509/should-you-buy-johnson-johnson-stock-before-july-16th
[2] https://seekingalpha.com/news/4467581-johnson-johnson-q2-preview-focus-on-tariff-threat-medtech-softness
[3] https://www.investing.com/news/stock-market-news/asml-johnson--johnson-bank-of-america-set-to-report-earnings-wednesday-93CH-4136410
[4] https://www.fool.com/investing/2025/07/15/should-you-buy-johnson-johnson-stock-before-july-1/