Will Johnson & Johnson Surprise with Its Q3 Earnings Report?

Johnson & Johnson (J&J) is expected to continue benefiting from its multiple myeloma drug, Darzalex, which has been a key growth driver for its pharmaceuticals division. Darzalex is projected to generate around $11 billion in sales for 2023, with $3 billion anticipated in Q3 alone. Other new drugs, such as Carvykti, another multiple myeloma treatment, and Spravato, an antidepressant, are also gaining market share.

In J&J’s MedTech segment, global procedure volume recovery and increased adoption of Abiomed’s Impella technology should boost growth. The acquisition of Shockwave Medical in May is expected to have further strengthened Q3 MedTech sales. However, China’s volume-based procurement (VBP) policy may continue to pressure the surgery franchise.

Despite ongoing legal challenges related to talcum powder and asbestos contamination, J&J's strong cash position will help manage settlement costs. Additionally, the company raised its quarterly dividend by 4.2% earlier this year, maintaining a six-decade tradition of annual dividend hikes. With a 3% dividend yield, J&J remains an appealing option for income-focused investors.