J&J Stock Trading Above 200- & 50-Day SMA for 8 Months: Time to Buy?

Johnson & Johnson’s JNJ stock has remained firmly above its 50-day and 200-day simple moving averages (SMAs) for more than eight months, dating back to mid-July 2025, reflecting sustained investor confidence. Notably, the stock formed a “golden cross” in July, when the 50-day SMA moved above the 200-day SMA, a widely followed technical indicator that signals the potential for a prolonged bullish trend. Since then, the 50-day SMA has consistently stayed above the 200-day level, reinforcing the view that J&J is in a durable uptrend supported by both technical momentum and improving business performance.

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This strong share price performance has been underpinned by multiple tailwinds, including steady growth in sales and earnings, robust contributions from both the Innovative Medicine and MedTech segments, and an optimistic outlook for 2026. Additionally, continued pipeline advancements, favorable regulatory developments, and strategic M&A activity have strengthened investor sentiment. That said, the company is not without challenges—most notably, the impact of patent expirations on key products, which could weigh on future revenue streams.

Against this backdrop, a closer look at the drivers and risks is essential to better assess J&J’s overall investment case and determine how investors might approach the stock following its recent run-up.

JNJ’s Innovative Medicine Showing Consistent Strength

J&J’s Innovative Medicine unit is showing a growth trend. The segment’s sales rose 4.1% on an organic basis in 2025 despite the loss of exclusivity (“LOE”) of its multi-billion-dollar product, Stelara and the negative impact of the Part D redesign. Growth was driven by J&J’s key drugs like Darzalex, Erleada and Tremfya. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato also contributed significantly to growth.

The segment recorded three consecutive quarters of sales of more than $15 billion despite the LOE of Stelara. The segment, for the first time, generated more than $60 billion in full-year sales in 2025, with 13 brands growing in double digits.

In 2026, J&J expects accelerated growth in the Innovative Medicine segment despite the Stelara LOE impact. Growth is expected to be driven by its key products, such as Darzalex, Tremfya, Spravato, Carvykti and Erleada, as well as new drugs. J&J expects a more pronounced impact from new products in 2026 than in 2025.

J&J’s Significant Pipeline Progress in 2025

In 2025, J&J invested more than $32 billion in R&D and M&A, including the acquisitions of Intra-Cellular Therapies and Halda Therapeutics.

The company rapidly advanced its pipeline in 2025, attaining significant clinical and regulatory milestones that will help drive growth through the back half of the decade. In 2025, it gained approval for new products like Inlexzoh/TAR-200, a first-of-its-kind drug-releasing system, for treating high-risk non-muscle invasive bladder cancer and Imaavy (nipocalimab) for treating generalized myasthenia gravis.

J&J believes that nipocalimab has a pipeline-in-a-product potential. The positive trend of new drug approvals continued in 2026 with the FDA approving J&J and partner Protagonist Therapeutics’ PTGX Icotyde (icotrokinra), an oral targeted peptide inhibitor of the IL-23 receptor, for treating moderate-to-severe plaque psoriasis (PsO) in the United States. J&J believes that Icotyde/icotrokinra has the potential to revolutionize the treatment of plaque psoriasis with a once-a-day pill.

Three of J&J’s new cancer drugs are Carvykti, a BCMA CAR-T therapy for relapsed or refractory multiple myeloma; Tecvayli, for relapsed or refractory multiple myeloma; and Talvey, a novel bispecific therapy for heavily pretreated multiple myeloma. These drugs have also begun to contribute to top-line growth. Combined, they generated $3.0 billion in sales in 2025.

J&J’s acquisition of Intra-Cellular Therapies added antidepressant drug, Caplyta, to its neuroscience portfolio, which is approved for the treatment of schizophrenia, depression in both bipolar 1 and 2, and major depressive disorder.

J&J believes 10 of its new products/pipeline candidates in the Innovative Medicine segment have the potential to deliver peak sales of $5 billion, including Talvey, Tecvayli, Imaavy, Caplyta, Inlexzo, Rybrevant, plus Lazcluze and Icotyde.

J&J’s MedTech Segment Sales Improving

J&J’s MedTech business has improved in the past three quarters, driven by the acquired cardiovascular businesses, Abiomed and Shockwave, as well as Surgical Vision and wound closure in Surgery. Improvements in J&J’s electrophysiology business also drove growth. MedTech sales rose 4.3% on an organic basis in 2025.

Moreover, the potential separation of its Orthopaedics franchise into a standalone orthopedics-focused company, called DePuy Synthes, should improve its MedTech unit’s growth and margins. The Orthopaedics franchise has been a slow-growth business for J&J.

In 2026, J&J expects better growth in the MedTech business than 2025 levels, driven by increased adoption of newly launched products across Cardiovascular, Surgery and Vision portfolios.

However, the company continues to face headwinds in China. Sales in China are being hurt by the impact of the volume-based procurement (VBP) program, which is a government-driven cost containment effort in China. J&J expects continued impacts from VBP issues in China in 2026.

Patent Expiration of J&J’s Drug Stelara & Other Headwinds

J&J lost U.S. patent exclusivity of Stelara in 2025. Stelara was a key top-line driver for J&J, accounting for around 18% of J&J’s Innovative Medicine unit’s sales in 2024, before it lost patent exclusivity in 2025.

Several biosimilar versions of Stelara were launched in the United States in 2025 as the drug lost patent exclusivity.

According to patent settlements and license agreements, Amgen AMGN, Teva Pharmaceutical Industries TEVA, Samsung Bioepis/Sandoz and some other companies launched Stelara biosimilars in 2025. Stelara’s LOE negatively impacted the Innovative Medicines segment’s growth by 10.4% in 2025. In 2026, J&J expects the Stelara LOE impact to be more pronounced. In addition, J&J expects generic impact for both Simponi and Opsumit to begin in 2026 as the drugs lose patent protection.

In addition, sales are being hurt by the impact of the Medicare Part D redesign under the Inflation Reduction Act (IRA). The Part D redesign is mainly affecting sales of drugs like Stelara, Erleada and pulmonary hypertension drugs.

J&J faces more than 74,000 lawsuits for its talc-based products, primarily baby powders. The lawsuits allege that its talc products contain asbestos, which caused many women to develop ovarian cancer. J&J insists that its talc-based products are safe and do not cause cancer. The company permanently discontinued the sales of the talc-based Johnson’s Baby Powder.

In April 2025, a bankruptcy court in Texas rejected J&J’s proposed bankruptcy plan to settle its talc lawsuits after a two-week trial in Houston. J&J has gone back to the traditional tort system to fight the lawsuits individually, with its bankruptcy strategy to settle the lawsuits failing for the third time.

J&J Stock Price, Valuation and Estimates

J&J’s shares have outperformed the industry in the past year. The stock has risen 46.2% in the past year compared with a 7.5% increase of the industry. The stock has also outperformed the sector and the S&P 500 Index, as seen in the chart below.

JNJ Stock Outperforms Industry, Sector & S&P 500

Image Source: Zacks Investment Research

From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 20.05 forward earnings, higher than 16.69 for the industry. The stock is also trading above its five-year mean of 15.65.

JNJ Stock Valuation

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The Zacks Consensus Estimate for 2026 earnings has risen from $11.46 to $11.54 over the past 60 days, while that for 2027 has gone up from $12.25 per share to $12.44 per share over the same timeframe.

JNJ Estimate Movement

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Long-Term Investors May Invest in J&J’s Stock

J&J’s biggest strength is its diversified business model, as it operates through pharmaceuticals and medical devices divisions. It has more than 275 subsidiaries and boasts 28 platforms or products with more than $1 billion in annual sales. Its diversification helps it to withstand economic cycles more effectively. It also boasts strong cash flows and has increased its dividends for 63 consecutive years.

J&J outperformed financial expectations in 2025 and looks optimistic for continued strong momentum in 2026, with a target to generate around $100 billion in revenues in the year. J&J expects sales growth in both segments to be higher in 2026.

Despite headwinds like the legal battle surrounding its talc lawsuits, the Stelara patent cliff, the upcoming LOE of key drugs Opsumit and Simponi and softness in MedTech China, J&J looks quite confident that it will be able to navigate these challenges.

J&J’s price appreciation, rising estimates, consistent earnings and sales growth, important new launches and pipeline depth suggest that long-term investors may consider investing in this Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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