July 27, 2021 8:00 AM
 — 
3
 min

Johnson & Johnson increased quarterly revenue in all divisions

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Johnson & Johnson posted strong 2Q2021 results. The company increased its net profit in the second quarter of 2021 by 73% thanks to the growth of revenue in all major divisions. J&J's quarterly revenue increased 27% to $ 23.312 from $ 18.336 billion. The consensus forecast for this indicator was $ 22.49 billion. According to a J&J press release, net profit in April-June rose to $ 6.278 billion, or $ 2.35 per share, up from $ 3.626 billion, or $ 1.36 per share, in the same period the previous year. Profit excluding one-off factors was $ 2.48 per share, beating the market average forecast of $ 2.29 per share.

TIKR
JNJ


PRICE
172$

TARGET PRICE
195$

UPSIDE
13%

S&P 500
4,398(-0.35%)

WTI СRUDE
71,89(-0.03%)

10Y UST
1,2760(0.00%)

BITCOIN
$37,230(-1.48%)

Second-quarter revenue for the consumer healthcare business rose 13.5% to $ 3.735 billion. Pharmaceuticals increased 17.2% to $ 12.599 billion and medical device revenue jumped 62.7% , to $ 6.978 billion. Revenue from sales of vaccines in the last quarter was $ 164 million. Strong performance in the second quarter allowed J&J to improve its forecasts for the full year. According to the new forecast, the company's adjusted earnings will be $ 9.5-9.6 per share (previous forecast - $ 9.3-9.45 per share), revenue - $ 92.5-93.3 billion (previous forecast - $ 89.3- 90.3 billion).

Last quarter, J&J increased its quarterly dividend by 5% to $ 1.01 per share. The indicative annual dividend yield is 2.5%. Successful drug testing can be distinguished from the main growth drivers of J&J shares: firstly, it justifies investment in research, and secondly, it helps to increase sales and business expansion. Johnson & Johnson's sales are expected to grow by $ 10.8 billion to $ 102 billion by 2023, driven by stronger sales of nine drugs alone, including Darzalex, Imbruvica, Erleada and Tremfya. We like Johnson & Johnson's business profile and the current macro environment, which is having a positive impact on the company's operations. We also like the issuer's stable dividend profile.

Johnson & Johnson is one of the world's largest and most diversified health care companies that offers products worldwide from its three major businesses divisions: Pharma, Medical Devices and Diagnostics, and Consumer products. JNJ is one of only four companies with a AAA credit rating, which gives it a tremendous amount of flexibility on its debt instruments and provides the company with unparalleled buying and selling opportunities in all market environments. JNJ consists of over 275 operating companies located in 60 countries. JNJ's top three priorities to shareholders are: (1) its dividend; (2) judicious M&A/L&A across the three divisions; and (3) share repurchases that eliminate dilution. The company intends to maintain its industry-leading dividend payout ratio at the 47% level or higher.

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