Wells Fargo Downgrades J&J Stock Rating Due to Stelara Patent Cliff

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Johnson & Johnson ($NYSE:JNJ) (J&J) is a multinational corporation that develops, manufactures, and markets a range of products in the health care, pharmaceutical, and consumer goods sectors. Recently, J&J’s stock rating from Wells Fargo has been downgraded from Equal Weight to Underweight due to the looming patent cliff for its immune-system drug, Stelara. Stelara, an inflammation and autoimmune disorder drug, has been a major source of revenue for J&J and if the patent cliff is reached, it would mean rivals would be able to produce generic versions of the drug. This could have a serious impact on J&J’s earnings and overall stock performance.

Stock Price

On Wednesday, JOHNSON & JOHNSON opened at $153.7 and closed at $155.8, up by 0.5% from its last closing price of 155.1. Stelara is J&J’s blockbuster rheumatoid arthritis treatment and its U.S. patent is set to expire in 2023, representing a potential major loss for the company. As a result, analysts expect future revenue and earnings to be impacted due to lower sales of Stelara after the expiration of its patent. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for JNJ. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for JNJ. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for JNJ. More…

Key Ratios Snapshot

Some of the financial key ratios for JNJ are shown below. More…

Analysis

At GoodWhale, we analyzed the fundamentals of JOHNSON & JOHNSON and found that it has a very high health score of 9/10. This suggests that this company is capable of riding out any crisis without the risk of bankruptcy. Furthermore, we classified JOHNSON & JOHNSON as a “cow” – a type of company with a track record of paying out consistent and sustainable dividends. JOHNSON & JOHNSON’s star chart also revealed that it is strong in terms of dividend, profitability and medium in asset while being weak in growth. Therefore, investors who are looking for stable and consistent returns may find JOHNSON & JOHNSON to be an attractive option. With its strong fundamentals and consistent returns, JOHNSON & JOHNSON could be a great choice for those who are looking for a stable income. More…

Peers

The competition between Johnson & Johnson and its competitors is fierce. AstraZeneca PLC, Pfizer Inc, and BioNTech SE are all major players in the pharmaceutical industry, and they are all vying for a piece of the pie. Johnson & Johnson is a well-established company with a long history of success, but its competitors are not to be underestimated. They are all large, well-funded companies with a lot to lose if they don’t win the competition.

– AstraZeneca PLC ($LSE:AZN)

AstraZeneca PLC is a biopharmaceutical company with a market cap of 152.13B as of 2022. The company focuses on the discovery, development, and commercialization of small molecule drugs in the areas of oncology, cardiovascular, and renal & metabolism. The company’s ROE for the year ended December 31, 2020 was -0.94%.

– Pfizer Inc ($NYSE:PFE)

Pfizer Inc is a pharmaceutical company with a market cap of 240.55B as of 2022. The company has a return on equity of 24.63%. Pfizer Inc is a research-based, global pharmaceutical company that discovers, develops, manufactures, and markets medicines for humans and animals. The company’s products include prescription and over-the-counter medicines, vaccines, and biologic therapies.

– BioNTech SE ($NASDAQ:BNTX)

BioNTech SE is a German biotech company founded in 2008 that focuses on the development of Innovation therapies against cancer and other serious diseases. The company has a market cap of 32.91B as of 2022 and a Return on Equity of 71.82%. BioNTech’s mission is to revolutionize the treatment of cancer and other serious diseases by leveraging the power of the immune system. The company is developing a portfolio of immunotherapy products based on its proprietary mRNA technology platform.

Summary

Johnson & Johnson has recently been downgraded by Wells Fargo to equal weight, primarily due to concerns about the patent cliff of Stelara, their blockbuster drug. Investors should evaluate the company’s potential to launch new products, expand existing ones, and look for new markets to increase their earnings.

Additionally, they should consider the effects of new regulations, competitive pressures, and macroeconomic trends on J&J’s profits. Furthermore, J&J’s dividend should be closely monitored to ensure it is providing a solid return on investment. Overall, investors should proceed with caution when considering a long-term investment in J&J.