Bank of America maintained a ‘Neutral’ rating on Johnson & Johnson (NYSE:JNJ) after the company posted third-quarter results slightly above expectations and hinted at a strategic MedTech shake-up.
In a note Wednesday, the bank highlighted that J&J’s third-quarter revenue and earnings per share beat consensus by roughly 1%, driven largely by stronger-than-expected performance from its Stelara biologic.
Full-year 2025 revenue guidance was raised modestly by $300 million, though EPS guidance was unchanged.
Analysts said the company’s newly disclosed plan to spin off its orthopedic business, expected in 18 to 24 months, could allow DePuy Synthes to focus more sharply and enhance its competitiveness.
Bank of America noted that while large acquisitions are unlikely, smaller deals could remain on the table.
The bank raised its price target to $204 from $198, reflecting slightly higher sales estimates across its forecast period, while EPS forecasts remained largely unchanged.
Analysts emphasized that Johnson & Johnson shows about-average growth at an above-average valuation, suggesting the stock is fairly priced.
“Strong performance year-to-date in 2025 likely reflects J&J being perceived as a comparatively safe and defensive name among large biopharma peers, alongside solid financial execution,” analysts wrote.
Bank of America’s updated model projects revenue growth of 1% to 3% over the next decade and flat-to-moderate EPS gains of up to 3%. The firm reiterated that J&J’s combination of stable growth and a premium valuation supports a neutral stance on the stock.