To The Moon

Good morning tiger community, I would like to share about my perspectives towards Johnson & Johnson, please feel free to comment and share with me too if you have any insights.

I. Introduction

Johnson & Johnson delivered outstanding performance in its 2023 third-quarter financial report, surpassing expectations with a 6.8% year-over-year revenue growth and showing continued improvements in profit. This analysis will delve into various aspects of the financial report while focusing on the company's operations and future outlook.

II. Financial Analysis

1. Revenue Growth: In Q3, the company achieved $21.35 billion in revenue, representing a 6.8% year-over-year increase, exceeding analysts' expectations. This achievement not only continues the previous quarter's growth trend but also signifies Johnson & Johnson's shift away from consumer health business to a focus on medical devices and innovative pharmaceuticals.

2. Business Contributions: Sales of innovative pharmaceuticals reached $13.89 billion, showing over 5% year-over-year growth, driven by biologics like Darzalex, prostate cancer treatment drug Erleda, and other oncology therapies. Medical devices business saw a 10% increase in sales, primarily due to the acquisition of Abiomed.

3. Profit Performance: Johnson & Johnson's net profit was $4.31 billion, remaining relatively stable year-over-year. However, under non-GAAP accounting standards, adjusted net profit was $6.78 billion, reflecting a 14.1% year-over-year increase, with earnings per share at $2.66, well above market expectations.

III. Operational Insights

1. Cost Improvement: Johnson & Johnson made significant progress in cost control, keeping sales and total expense costs within manageable limits. This improvement played a crucial role in the performance, maintaining a stable gross profit margin.

2. Full-Year Performance Guidance: The company has repeatedly raised its full-year performance guidance, expecting sales and adjusted earnings per share to exceed previous estimates. This indicates management's confidence in the company's future.

3. Talcum Powder Lawsuit: However, despite the strong performance, the talcum powder lawsuit remains a major negative factor. The company faces substantial compensation claims, and it is unclear whether these claims will continue to rise, necessitating ongoing vigilance.

IV. Technical Analysis Perspective

In the long-term trend, Johnson & Johnson's stock price has been steadily rising, but in recent years, it has experienced greater volatility due to overall performance challenges. Following the company's split, a more focused approach on pharmaceuticals and medical devices holds promising future prospects.

V. Personal Conclusion

1. Johnson & Johnson's Q3 2023 performance is impressive, with continued growth in core businesses and exceptional profit performance, especially in cost control.

2. The consistent upward revision of full-year performance guidance indicates the company's potential for continued growth.

3. The talcum powder lawsuit remains a potential risk that requires ongoing monitoring.

4. Johnson & Johnson retains stable long-term investment value, despite recent stock price fluctuations, with the company's future prospects deserving attention.

$Johnson & Johnson(JNJ)$ 

Happy reading. 🧐 

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