Its Biggest Drug Is Collapsing. Sales Are Still Climbing. Tuesday Shows Why.
Research Desk · October 8, 2026
Johnson & Johnson (NYSE: JNJ). Logo via Wikimedia Commons, used for editorial identification.
- Johnson & Johnson (NYSE: JNJ) reports third-quarter results before the opening bell on Tuesday, October 13, with Wall Street looking for roughly $25.3 billion in sales.
- Last quarter, sales rose 6.6% to $25.31 billion even as Stelara, once its top-selling drug, lost ground to cheaper copies. Without that drag, growth would have been in the low teens.
- The company has raised its dividend for 64 straight years, now pays $5.36 a share (about a 2.1% yield), and is guiding to more than $100 billion in 2026 sales.
Earnings season starts in earnest next week. The big banks get most of the attention on Tuesday morning.
But for income investors, the more important report that morning may come from New Brunswick, New Jersey.
Johnson & Johnson (NYSE: JNJ) releases third-quarter results at about 6:45 a.m. Eastern on October 13. The stock closed Wednesday near $258, roughly 8% below its 52-week high of $281.
That pullback has set up a clean test. Investors get to see whether one of the oldest dividend payers in America can keep growing while its former best seller fades.
Losing a Blockbuster and Growing Anyway
For years, J&J's biggest drug was Stelara, a treatment for psoriasis and Crohn's disease. Its patent protection has ended, and lower-priced biosimilar versions are now taking its place on pharmacy shelves.
Most companies stall when that happens. Think of a family restaurant whose famous signature dish suddenly shows up at every diner in town for half the price.
J&J's answer was to fill the menu before the signature dish went generic. Cancer drugs like Darzalex and Carvykti, the immunology treatment Tremfya, and the depression therapy Spravato are all growing fast.
The numbers show how well that worked. In the second quarter, Stelara's decline shaved about 7.6 percentage points off growth. Operational sales still rose 5.6%.
Two Engines, One Paycheck
J&J now runs two businesses. Innovative Medicine, the prescription drug side, brought in $16.38 billion last quarter, up 7.8%.
MedTech, which makes surgical tools, heart devices and orthopaedic implants, added $8.93 billion, up 4.5%.
Together they produced adjusted earnings of $2.90 a share, up 4.7%. Free cash flow for the first half of the year came in around $8.7 billion.
That cash is what funds the dividend. In April the company raised its payout for the 64th consecutive year, through recessions, inflation spikes and a pandemic.
What to Watch on Tuesday
In July, management lifted its full-year outlook. It now expects sales of $100.8 billion to $101.4 billion and adjusted earnings of $11.60 to $11.75 a share.
The first question on Tuesday is simple: does that outlook hold, or move higher again?
The second is how fast the new drugs are replacing Stelara. The third is MedTech, where heart-rhythm products face price pressure in China.
The Blemish Investors Cannot Ignore
Talc litigation has followed J&J for years. Thousands of lawsuits claim its old baby powder caused cancer, and the company has tried more than once to settle them through the courts.
J&J disputes the claims and has a balance sheet large enough to absorb a settlement. Still, every new ruling can move the stock for a day or a week.
There is also the matter of drug pricing in Washington. Any policy that cuts what Medicare pays for top-selling medicines lands directly on the Innovative Medicine side.
A Fair Price for a Durable Business
J&J is not cheap the way it was a year ago. The stock has climbed from a 52-week low near $183 and now trades around 24 times expected earnings.
Analysts mostly like it anyway. Of 25 analysts covering the stock, 19 rate it a buy and none rate it a sell. The average price target sits near $276.
Several firms raised targets in the past two weeks. Citigroup moved to $303, and the highest target on the Street is $320.
The bear case has a number too. The lowest target sits at $210, about 19% below Wednesday's close. A weak quarter or a bad talc ruling could push the stock toward that level.
There is one more change on the horizon. J&J plans to separate its orthopaedics business by mid-2027, which would leave a leaner company focused on faster-growing products.
The Bottom Line
Johnson & Johnson is doing something few companies manage. It is losing its biggest product and still growing sales, earnings and the dividend at the same time.
For a retirement portfolio, that is the whole point. The payout has risen every year since 1963, and the business behind it is stronger than the headlines suggest.
Tuesday's report will show whether the new drugs are carrying the load fast enough. Investors who own the stock, or are thinking about it, will want to read it closely.
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