◆ Inside the Latest Quarter (Q2 2026)

Johnson & Johnson (JNJ) — the variant view

J&J's second quarter showed Tremfya selling nearly three times as much as Stelara, and then two deals cut the year's guidance.

📈 JNJ valuation, revenue & earnings — P/E, P/S, revenue, EPS →

J&J's second quarter of 2026, ended 28 June, was a clean quarter followed by a busy fortnight. Sales rose 6.6% to $25,310 million, 5.6% operationally1. Innovative Medicine grew 7.8% to $16,384 million and MedTech 4.5% to $8,926 million2. Gross margin was 68.2% against 67.9%3.

Q2 2026 sales growth by segment and product (%)+6.6Total+7.8InnovativeMedicine+4.5MedTech+18.9Darzalex+72.5Tremfya-55.2StelaraJ&J Q2 2026 results release and financial schedules
Tremfya and Darzalex outran the Stelara decline.

The medicines business did the work. Darzalex rose 18.9% to $4,207 million, Carvykti 49.4% and Tremfya 72.5% to $2,046 million, while Stelara fell 55.2% to $740 million4. The company put Stelara's drag on Innovative Medicine operational growth at about 760 basis points5. Segment income before tax was $6,249 million in Innovative Medicine, a 38.1% margin, and $1,177 million in MedTech, 13.2%67.

MedTech was softer. Abiomed fell 2.0%, and 4.8% in the United States; Shockwave grew 14.6% and electrophysiology 4.4%8. Orthopaedics, the business being separated, grew 4.9%9.

Earnings were flat on a reported basis: net earnings $5,534 million against $5,537 million, EPS $2.27 against $2.29, with the effective tax rate up to 18.0% from 14.7%1011. Adjusted EPS rose 4.7% to $2.9012. Selling, marketing and administrative expenses grew 9.2%, faster than sales13. J&J raised 2026 guidance to $11.68 of adjusted EPS14.

Then the quarter's news was overtaken. On 27 July J&J proposed a $5.5 billion talc resolution15; on 29 July it completed Firefly, signed Sail, and cut adjusted EPS guidance to $11.0416. On 4 August it announced that Jennifer Taubert, head of Innovative Medicine, would retire, succeeded by Tom Cavanaugh from 1 September17.

Geography was balanced. United States sales rose 7.3% to $14,533 million and international sales 5.7% to $10,777 million, with currency adding 2.3 points abroad18. The quarter's adjusted pre-tax margin was 34.2% against 34.5% a year earlier19, so the earnings growth came from sales, not from widening margins.

The underlying quarter showed the replacement machine working and MedTech lagging. In the third-quarter report on 13 October20, the figure that matters is the talc charge J&J books against the $5.5 billion proposal; a charge well above $1.8 billion would mean the reserve was further from the settlement than it appeared.

References
  1. ReportedSales rose 6.6% to $25,310 million, 5.6% operationally.
    Johnson & Johnson second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 15 July 2026 · source ↗
  2. ReportedInnovative Medicine grew 7.8% to $16,384 million and MedTech 4.5% to $8,926 million.
    Johnson & Johnson second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 15 July 2026 · source ↗
  3. ReportedGross margin was 68.2% against 67.9%.
    Johnson & Johnson second-quarter 2026 supplementary sales data, statement of earnings and non-GAAP reconciliation, Form 8-K exhibit 99.2 - statement of earnings and non-GAAP reconciliation. — Q2 2026 · publ. 15 July 2026 · source ↗
  4. ReportedDarzalex rose 18.9% to $4,207 million, Carvykti 49.4% and Tremfya 72.5% to $2,046 million, while Stelara fell 55.2% to $740 million.
    Johnson & Johnson second-quarter 2026 supplementary sales data, statement of earnings and non-GAAP reconciliation, Form 8-K exhibit 99.2 - Innovative Medicine and total sales by product, segment and region. — Q2 2026 · publ. 15 July 2026 · source ↗
  5. ReportedThe company put Stelara's drag on Innovative Medicine operational growth at about 760 basis points.
    Johnson & Johnson second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 15 July 2026 · source ↗
  6. ReportedSegment income before tax was $6,249 million in Innovative Medicine, a 38.1% margin, and $1,177 million in MedTech, 13.2%.
    Johnson & Johnson Form 10-Q for the quarter ended 28 June 2026 - segment income, talc, net debt, repurchases and equity. — Q2 2026 · publ. 23 July 2026 · source ↗
  7. Moat Explorer calcSegment income before tax was $6,249 million in Innovative Medicine, a 38.1% margin, and $1,177 million in MedTech, 13.2%.
    Moat Explorer calculation from Johnson & Johnson's reported figures ($ millions unless stated). Darzalex royalty: 2,400 / 14,351 = 16.7%. Stelara 2023-2025: 10,858 - 6,078 = 4,780 lost; Tremfya 5,155 - 3,147 = 2,008 gained, 2,008 / 4,780 = 42%. Growth 2023-2025: Darzalex 14,351 - 9,744 = 4,607; Carvykti 1,887 - 500 = 1,387; Erleada 3,574 - 2,387 = 1,187; Spravato 1,696 - 689 = 1,007; five products 4,607 + 2,008 + 1,387 + 1,187 + 1,007 = 10,196. Myeloma medicines Q2 2026: 4,207 + 657 + 260 + 174 = 5,298; 5,298 / 25,310 = 20.9%. Simponi and Opsumit 2025: 2,668 + 2,325 = 4,993. Abiomed: 3,700 / 1,751 = 2.1 times; 1,751 x 1.171^5 = 3,850 by 2030. Shockwave: 12,600 / 1,146 = 11.0 times. Caplyta: 361 x 4 = 1,444 a year; 14,500 / 1,444 = 10.0 times. Acquisitions: 15,146 + 17,541 = 32,687. Goodwill and intangibles: 48,772 + 50,403 = 99,175; 99,175 / 199,210 = 49.8%. Free cash flow 2025: 24,530 - 4,832 = 19,698. Cash uses 2025: 12,381 + 5,953 + 17,541 = 35,875. Capex 4,832 / 94,193 = 5.1%. Surgery: 10,137 / 10,037 - 1 = 1.0%. Electrophysiology: 5,634 / 33,792 = 16.7%. MedTech share of sales: 33,792 / 94,193 = 35.9%; Innovative Medicine 60,401 / 94,193 = 64.1%. Segment income 2025: 22,266 + 4,113 = 26,379; Innovative Medicine 22,266 / 26,379 = 84.4%; MedTech 4,113 / 26,379 = 15.6%. Gross margin 63,937 / 94,193 = 67.9%. MedTech rebates: 6,446 / 33,792 = 19.1%; 5,955 / 31,857 = 18.7%. Return on identifiable assets: Innovative Medicine 22,266 / 78,057 = 28.5%; MedTech 4,113 / 86,482 = 4.8%. Cost of products sold / segment sales 2025: Innovative Medicine 15,646 / 60,401 = 25.9%; MedTech 14,549 / 33,792 = 43.1%. Q2 2026 segment margins: Innovative Medicine 6,249 / 16,384 = 38.1%; MedTech 1,177 / 8,926 = 13.2%. Growth 2023-2025: sales 94,193 / 85,159 - 1 = 10.6%; operating cash flow 24,530 / 22,791 - 1 = 7.6%; dividends 12,381 / 11,770 - 1 = 5.2%. Dividends per share 5.14 / 2.95 - 1 = 74%. Payout 2025: 12,381 / 26,804 = 46%; 12,381 / 26,215 = 47%; 12,381 / 19,698 = 63%. Diluted shares 2,429.4 / 2,812.9 - 1 = -13.6%; Kenvue exchange 190.96 / 2,674.0 = 7.1%. Firefly and Sail initial payments: 1,000 + 785 = 1,785. Consumer sales 2015-2022: (14,953 / 13,507)^(1/7) - 1 = 1.5% a year. Wholesalers: 21.8 + 15.5 + 11.1 = 48.4 (2025); 20.5 + 15.6 + 12.3 = 48.4 (2024); 18.2 + 15.1 + 14.2 = 47.5 (2023); largest 21.8 - 18.2 = 3.6 points. Innovative Medicine rebates: 56,819 / 60,401 = 94.1% (2025); 47,523 / 54,759 = 86.8% (2023); 56,819 / 47,523 - 1 = 19.6%; net sales 60,401 / 54,759 - 1 = 10.3%. Top three products: 15.0 + 6.5 + 5.5 = 27.0% of revenue. United States share: 53,752 / 94,193 = 57.1% (2025); 14,533 / 25,310 = 57.4% (Q2 2026). MedTech excluding orthopaedics: (33,792 - 9,258) / (31,857 - 9,158) - 1 = 8.1%. Talc: 5,500 / 76,000 claims = about $72,000 per claim; 5.5 - 3.7 = 1.8 billion. Valuation: 348.19 / 24.242 = 14.4 times (end-2024 market value over 2024 adjusted net earnings); 652.05 / 348.19 - 1 = 87%; 270.57 / 11.04 = 24.5 times; 11.04 / 10.79 - 1 = 2.3%; 277.91 / 270.57 - 1 = 2.7%. Innovative Medicine history: (60,401 / 31,430)^(1/10) - 1 = 6.8% a year; Pharmaceutical pre-tax margins 11,734 / 31,430 = 37.3% (2015), 12,827 / 33,464 = 38.3% (2016), 8,816 / 42,198 = 20.9% (2019); restated growth 52,563 / 51,680 - 1 = 1.7% (2022), 54,759 / 52,563 - 1 = 4.2% (2023), 56,964 / 54,759 - 1 = 4.0% (2024). Additional: 2015 mix 31,430 / 70,074 = 45%; dividend 5.36 / 11.04 = 49%; buybacks 4,253 / 5,953 = 71%; vision 5,468 / 33,792 = 16%; Innovative Medicine international 60,401 - 36,344 = 24,057 against 54,759 - 31,169 = 23,590 (2.0%); United States 36,344 / 31,169 - 1 = 16.6%; myeloma four-product growth 2023-2025 4,607 + 1,387 + (670 - 395) + (463 - 63) = 6,669 of oncology growth 25,380 - 17,661 = 7,719, 86%; Darzalex international 1,772 / 4,207 = 42%; equity gap 99,175 - 81,544 = 17,631; Abiomed 440 x 4 = 1,760; amortisation MedTech 0.5 / 1.3 = 38%; MedTech H1 2026 segment income 2,416 / 2,625 - 1 = -8.0%, SM&A 5,975 / 5,518 - 1 = 8.3%, R&D 1,492 / 1,324 - 1 = 12.7%, cost of products sold 7,438 / 6,964 - 1 = 6.8%, margins 2,416 / 17,562 = 13.8% and 2,625 / 16,561 = 15.9%; Innovative Medicine H1 2026 11,566 / 10,762 - 1 = 7.5%, 11,566 / 31,810 = 36.4%; dividends / operating cash flow 12,381 / 24,530 = 50%; receivables 17,178 - 14,842 = 2,336, inventories 14,191 - 12,444 = 1,747; Q2 2026 dividend 3,227 x 4 = 12,908, one cent x 4 x 2,408M shares = $96M; diluted shares 2,663.9 / 2,812.9 - 1 = -5.3%; MedTech United States 17,408 / 33,792 = 52%; international sales 94,193 - 53,752 = 40,441; oncology share of Innovative Medicine 25,380 / 60,401 = 42.0%; Darzalex sales increase 14,351 - 11,670 = 2,681, royalty increase 2,400 - 2,000 = 400, 400 / 2,681 = 15%; newer myeloma medicines Q2 2026 657 + 260 + 174 = 1,091, 1,091 / 4,207 = 26%; Shockwave international 67 / 335 = 20%; amortisation 2,492 x 2 = 4,984 a year, 4,984 / 26,215 = 19%; US long-lived assets 89,392 - 70,670 = 18,722; surgery international Q2 2026 1,559 / 2,653 = 59%; net interest 1,056 - 971 = 85; dividends per share 5.14 / 4.70 - 1 = 9.4%; MedTech rebates 6,446 / 5,955 - 1 = 8.2%; trailing sales 94,193 - 45,636 + 49,372 = 97,929; net earnings 26,804 - 16,536 + 10,769 = 21,037. MedTech history: (33,792 / 25,137)^(1/10) - 1 = 3.0% a year; Medical Devices 6,826 / 25,137 = 27.2% (2015), 5,392 / 26,592 = 20.3% (2017); restated 4,208 / 27,060 = 15.6% (2021), 4,447 / 27,427 = 16.2% (2022); growth 27,427 / 27,060 - 1 = 1.4% (2022), 30,400 / 27,427 - 1 = 10.8% (2023), 31,857 / 30,400 - 1 = 4.8% (2024) - segment margins, rebates, concentration and geography. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in J&J's Forms 10-K, 10-Q, results releases and market data; operands shown in the source line.
  8. ReportedAbiomed fell 2.0%, and 4.8% in the United States; Shockwave grew 14.6% and electrophysiology 4.4%.
    Johnson & Johnson second-quarter 2026 supplementary sales data, statement of earnings and non-GAAP reconciliation, Form 8-K exhibit 99.2 - MedTech segment and franchise sales by region. — Q2 2026 · publ. 15 July 2026 · source ↗
  9. ReportedOrthopaedics, the business being separated, grew 4.9%.
    Johnson & Johnson second-quarter 2026 supplementary sales data, statement of earnings and non-GAAP reconciliation, Form 8-K exhibit 99.2 - MedTech segment and franchise sales by region. — Q2 2026 · publ. 15 July 2026 · source ↗
  10. ReportedEarnings were flat on a reported basis: net earnings $5,534 million against $5,537 million, EPS $2.27 against $2.29, with the effective tax rate up to 18.0% from 14.7%.
    Johnson & Johnson second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 15 July 2026 · source ↗
  11. ReportedEarnings were flat on a reported basis: net earnings $5,534 million against $5,537 million, EPS $2.27 against $2.29, with the effective tax rate up to 18.0% from 14.7%.
    Johnson & Johnson second-quarter 2026 supplementary sales data, statement of earnings and non-GAAP reconciliation, Form 8-K exhibit 99.2 - statement of earnings and non-GAAP reconciliation. — Q2 2026 · publ. 15 July 2026 · source ↗
  12. ReportedAdjusted EPS rose 4.7% to $2.90.
    Johnson & Johnson second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 15 July 2026 · source ↗
  13. ReportedSelling, marketing and administrative expenses grew 9.2%, faster than sales.
    Johnson & Johnson second-quarter 2026 supplementary sales data, statement of earnings and non-GAAP reconciliation, Form 8-K exhibit 99.2 - statement of earnings and non-GAAP reconciliation. — Q2 2026 · publ. 15 July 2026 · source ↗
  14. ReportedJ&J raised 2026 guidance to $11.68 of adjusted EPS.
    Johnson & Johnson second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 15 July 2026 · source ↗
  15. ReportedOn 27 July J&J proposed a $5.5 billion talc resolution; on 29 July it completed Firefly, signed Sail, and cut adjusted EPS guidance to $11.04.
    Johnson & Johnson announcement of a proposed resolution of ovarian talc litigation, Form 8-K exhibit 99.1. — July 2026 · publ. 27 July 2026 · source ↗
  16. ReportedOn 27 July J&J proposed a $5.5 billion talc resolution; on 29 July it completed Firefly, signed Sail, and cut adjusted EPS guidance to $11.04.
    Johnson & Johnson Form 8-K of 29 July 2026 - updated 2026 guidance after the Firefly and Sail transactions, and the 2027 dilution. — July 2026 · publ. 29 July 2026 · source ↗
  17. ReportedOn 4 August it announced that Jennifer Taubert, head of Innovative Medicine, would retire, succeeded by Tom Cavanaugh from 1 September.
    Johnson & Johnson announcement of the retirement of Jennifer Taubert and appointment of Tom Cavanaugh, Form 8-K exhibit 99.1. — August 2026 · publ. 4 August 2026 · source ↗
  18. ReportedUnited States sales rose 7.3% to $14,533 million and international sales 5.7% to $10,777 million, with currency adding 2.3 points abroad.
    Johnson & Johnson second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 15 July 2026 · source ↗
  19. ReportedThe quarter's adjusted pre-tax margin was 34.2% against 34.5% a year earlier, so the earnings growth came from sales, not from widening margins.
    Johnson & Johnson second-quarter 2026 supplementary sales data, statement of earnings and non-GAAP reconciliation, Form 8-K exhibit 99.2 - statement of earnings and non-GAAP reconciliation. — Q2 2026 · publ. 15 July 2026 · source ↗
  20. ReportedIn the third-quarter report on 13 October, the figure that matters is the talc charge J&J books against the $5.5 billion proposal; a charge well above $1.8 billion would mean the reserve was further from the settlement than it appeared.
    Johnson & Johnson (JNJ) market data - $270.57 a share on 24 September 2026, market cap $652.05B, dividend $5.36 (1.98%), 52-week range 175.74-281.07. — September 2026 · publ. 24 September 2026 · source ↗
Sources
Generated September 24, 2026