research report · JNJ

Johnson & Johnson

Johannes Vermeer, Woman Holding a Balance, c. 1664, detail · National Gallery of Art

Viridis’s deep research report, written Nov 1, 2026 from its quarterly report (10-Q for the quarter ended Sep 27, 2026, filed Oct 21, 2026). Written and checked with Anthropic’s Claude models.

your email, no card; what you get

business trajectory

Improving

better on balance: sales, margins, cash or competitive position

financial resilience

Strong

can meet its obligations and fund its plan for two years with money it can count on, with room

Judgments of the business from its filings, not of its shares: no valuation, no advice.

bottom line

Johnson & Johnson's drug business is outgrowing the loss of its second-largest product. The third quarter's near-zero profit came from legal and deal charges, not from weaker operations. Sales rose 6.0% excluding currency, to $25.4B, even though STELARA, now facing biosimilars (cheaper copies of a biologic drug), took about 4.2 points off growth. Net earnings fell to $210M from $5,152M on a $5.5B talc accrual, a ~$1.0B Firefly charge and a ~$0.3B Sail option premium. The soft spots are MedTech, which grew 2.5%, and a talc settlement that is still conditional.

what changed this quarter

  • Sales were $25,399M, up 5.9% reported and 6.0% operational (excluding currency). Innovative Medicine grew 7.9% and MedTech 2.5% operationally.
  • Diluted EPS was $0.09 versus $2.12. Adjusted EPS was $2.59 versus $2.80, and that measure still carries the Firefly and Sail costs.
  • The midpoint of 2026 adjusted EPS guidance rose to $11.10 from $11.04 (July 29). The July 29 figure had itself been cut from $11.68 because of the deals. The reported sales midpoint rose to $101.2B from $101.1B.
  • July 27: a proposed ovarian talc resolution with a $5.5B commitment, conditioned on at least 95% of remaining claims taking part.
  • July 29: Firefly Bio bought for $1B cash, and a Sail Biomedicines deal with $785M of initial payments plus an option to buy Sail for $2.58B. September 1: Tom Cavanaugh succeeded the retiring Jennifer Taubert as head of Innovative Medicine.

in the full report

Its findings, each with the evidence, the strongest counterpoint and what would prove it wrong:

  • Innovative Medicine is absorbing the STELARA cliff, but more patent losses arrive in 2027
  • The loss is charges, but "adjusted" earnings include deal costs and the charges recur
  • The ovarian talc deal schedules one docket's cost, but it is conditional
  • MedTech has slowed and missed management's own expectations

Then its finances, the quality of its earnings, its management, the case for and against, and what to watch, its claims cited to the filings and checked against them.

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