Johnson & Johnson (JNJ) is preparing to announce its third-quarter earnings on October 15, with analysts forecasting an earnings per share (EPS) of $2.21 and revenue of $22.16 billion. Recent strategic moves in MedTech and setbacks in drug trials have captured investor attention as the company approaches its earnings release.
MedTech Expansion with V-Wave Acquisition
J&J recently finalized its acquisition of V-Wave, integrating a minimally invasive cardiovascular treatment into its MedTech division. The Ventura Interatrial Shunt is designed to improve outcomes for patients with heart failure. While this acquisition is expected to strengthen J&J's position in the cardiovascular space, the company has cautioned that it will dilute adjusted EPS by approximately 24 cents in 2024 and 6 cents in 2025.
Discontinued SunRISe-2 Trial for Bladder Cancer
In contrast to its MedTech advancements, J&J had to halt its Phase 3 SunRISe-2 trial. This trial was evaluating a treatment for muscle-invasive bladder cancer but was terminated early after failing to demonstrate superiority over chemoradiation. Despite this setback, J&J remains optimistic about its TARIS platform, projecting a potential of $5 billion.
Stock Performance and Market Signals
Johnson & Johnson’s stock has shown modest gains this year, up 0.93% year-to-date and 2.49% over the past year. However, the stock has seen a 9.40% increase in the last six months, indicating a gradual recovery. Trading at $161.46, JNJ stock is slightly above its eight-day simple moving average of $160.48, a potentially positive signal. Yet, it remains below its 20-day and 50-day simple moving averages of $162.32 and $162.53, respectively, suggesting persistent selling pressure.
The Moving Average Convergence/Divergence (MACD) indicator, at -0.72, leans bearish, hinting at continued downward pressure. The Relative Strength Index (RSI) of 47.83 places the stock in neutral territory. Bollinger Bands indicate a range between $157.98 and $168.05, with JNJ stock positioned in the lower bearish band, potentially signaling a possible bounce, though caution is advised given the existing selling pressure.
Q3 Earnings Outlook
Investors are keenly awaiting J&J's third-quarter earnings report, particularly for updates on the company's guidance following the V-Wave acquisition and the performance of its MedTech and Innovative Medicine segments. The upcoming earnings report will be crucial in determining whether J&J stock can overcome recent pressures and revitalize its overall performance.
