JNJ: 3 Pharmaceutical Stocks Addressing Global Health Challenges

The pharmaceutical sector plays a crucial role in tackling global health issues, from combating infectious diseases to addressing chronic illnesses. The companies in this sector are not only developing groundbreaking treatments but also improving access to life-saving drugs.

Amid this backdrop, investors looking to tap into the pharmaceutical sector might consider buying these three fundamentally strong pharma stocks Pfizer Inc. (PFE), Johnson & Johnson (JNJ), and Merck & Co., Inc. (MRK) for potential gain.

As the world faces rising healthcare demands, innovative pharmaceutical firms are stepping up to meet these challenges. Technological advancements such as AI-driven drug discovery and precision medicine enable faster development of treatments and personalized care, addressing the unique needs of individual patients. Pharmaceutical manufacturers are already using Gen AI foundational models to identify targets, develop validation assays, and assist in preclinical testing to determine their effectiveness.

One of the key drivers of growth in the pharmaceutical sector is the rising prevalence of non-communicable diseases such as diabetes, cardiovascular conditions, and cancer. Companies investing in advanced therapies, including biologics and gene editing, are positioned to benefit from this trend. With 50 novel drugs approved by the U.S. Food and Drug Administration (FDA) in 2024, the pharmaceutical sector is likely to see sustained growth and long-term relevance.

Furthermore, the U.S. pharmaceutical market is anticipated to reach $764.06 billion by 2033, exhibiting a CAGR of 5.5%.

Now, let us dive deep into the fundamentals of three Medical – Pharmaceuticals stocks, starting with third.

Stock #3: Pfizer Inc. (PFE)

PFE is a global leader in biopharmaceuticals, offering a wide range of medicines and vaccines across several therapeutic areas. Its diverse portfolio spans treatments for cardiovascular conditions, metabolic issues, migraines, women’s health, and infectious diseases, including COVID-19 prevention and treatment. It also explores future mRNA and antiviral therapies and provides biosimilars for chronic immune and inflammatory conditions.

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On December 20, PFE received approval from the U.S. Food and Drug Administration (FDA) for BRAFTOVI^® (encorafenib) in combination with cetuximab and mFOLFOX6 for the treatment of patients with BRAF V600E-Mutant metastatic colorectal cancer. This approval is first-in-line in the development of innovative medicines for the hardest-to-treat cancers, also expanding PFE’s portfolio.

Moreover, on November 20, PFE announced that it received approval from the European Commission (EC) for HYMPAVZI for the routine prevention of bleeding episodes in patients 12 years of age and older weighing at least 35 kg with severe hemophilia A without FVIII inhibitors or severe hemophilia B without FIX inhibitors. this approval will strengthen PFE’s position in the genetic disease treatment market as HYMPAVZI is the first and only anti-tissue factor pathway inhibitor approved by EC.

PFE pays a $1.72 per share dividend annually, translating to a 6.72% yield on the current share price. Its four-year dividend yield is 4.32%.

PFE’s total revenues for the third quarter (ended September 30, 2024) increased 31.2% year-over-year to $17.70 billion. The company’s non-GAAP net income stood at $6.05 billion compared to the prior-year quarter’s loss of $968 million, while its earnings per share came in at $1.06 versus a loss of $0.17 per share last year.

As a result of its impressive performance, the company updated its fiscal year 2024 financial guidance, increasing its revenue projection to a range of $61 billion to $64 billion, up from the previous estimate of $59.50 billion to $62.50 billion. Additionally, it has raised its adjusted EPS guidance to a new range of $2.75 to $2.95, higher than the prior forecast of $2.45 to $2.65.

Analysts expect PFE’s revenue for the fourth quarter (ended December 2024) to grow 20.3% year-over-year to $17.14 billion, while its EPS for the same period is expected to increase 360.4% from the prior year-quarter to $0.46. Moreover, the company has surpassed Street revenue and EPS estimates in three of the trailing four quarters.

Shares of PFE have surged 4.5% over the past month to close the last trading session at $26.72.

PFE’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

PFE has an A grade for Growth and a B for Value. It is ranked #34 out of 151 stocks in the Medical – Pharmaceuticals industry.

Click here to see the additional ratings for PFE (Momentum, Stability, Sentiment, and Quality).

Stock #2: Johnson & Johnson (JNJ)

JNJ is engaged in the research and development, manufacture, and sale of healthcare products primarily focused on human health and well-being. The company offers a diversified range of products through the Innovative Medicine segment and MedTech segment.

On January 10, JNJ announced European CE mark approval of the Dual Energy THERMOCOOL SMARTTOUCH™ SF Catheter for the treatment of cardiac arrhythmias. This offers electrophysiologists the ability to switch between radiofrequency and pulsed field energy in a single, fully integrated catheter, delivering safe and effective procedures for patients.

On December 30, JNJ announced that it had received the European Commission approval for RYBREVANT® (amivantamab) in combination with LAZCLUZE™ (lazertinib) for the first-line treatment of advanced non-small cell lung cancer (NSCLC) in adults with EGFR mutations. This multitargeted, chemotherapy-free combination as shown superior efficacy compared to Osimertinib monotherapy for treating EGFR-mutated NSCLC.

For the nine-month period that ended September 30, 2024, JNJ’s sales to customers increased 4% year-over-year to $66.30 billion. Its gross profit rose 4.5% from the year-ago value to $45.96 billion. The company’s net earnings from continuing operations amounted to $6.84 billion, representing a 15.7% increase from the same period last year. Also, its net earnings per share from continuing operations for the period increased 24.1% year-over-year to $4.38.

JNJ’s revised outlook for the fiscal year 2024 anticipates operational sales in the range of $89.40 billion to $89.80 billion, marking a 6.6% growth compared to 2023, largely fueled by recent acquisitions. The company also projects adjusted EPS between $9.88 and $9.98.

Street expects JNJ’s revenue for the fiscal year (ended December 2024) to increase 4.3% year-over-year to $88.78 billion. Its EPS for the same year is expected to register a marginal growth from the prior year, settling at $9.96.

JNJ shares have declined marginally intraday, closing the last trading session at $142.06.

JNJ’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.

JNJ has a B grade for Value, Stability, Sentiment, and Quality. It is ranked #14 in the same industry.

Click here to see the additional ratings for JNJ (Growth and Momentum).

Stock #1: Merck & Co., Inc. (MRK)

MRK is a global healthcare company offering health solutions through its prescription medicines, including biological therapies, vaccines, and animal health products. It operates through two segments: Pharmaceutical and Animal Health.

On January 8, MRK announced the National Medical Products Administration (NMPA) of China approved GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16, and 18) Vaccine] for use in males aged 9 to 26. This approval makes GARDASIL the first HPV vaccine in China, helping MRK strengthen its position.

On December 20, MRK announced the closing of the exclusive global license agreement for LM-299, a novel investigational PD-1/VEGF bispecific antibody, from LaNova Medicines Ltd. This agreement will allow MRK to develop, manufacture, and commercialize LM-299.

During the nine-month period ended September 30, 2024, MRK’s sales increased 6.7% year-over-year to $48.54 billion, while its pharmaceutical segment’s sales improved by 7.2% from the prior year’s value to $43.36 billion. The company’s net income attributable rose significantly from the year-ago value to $13.37 billion, while its EPS stood at $5.26, up considerably year-over-year.

According to the full-year 2024 guidance, MRK forecasts worldwide sales to range from $63.60 billion to $64.10 billion, an increase from the previous guidance of $63.40 billion to $64.40 billion. The company also expects non-GAAP EPS to be between $7.72 and $7.77.

The consensus revenue estimate of $15.52 billion for the fiscal fourth quarter (ending December 2024) represents a 6.1% increase year-over-year. The consensus EPS estimate of $1.79 for the current quarter indicates a considerable improvement year-over-year.

The company has an impressive surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.

The stock declined marginally intraday, closing the last trading session at $99.25.

MRK’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

It also has an A grade for Quality and a B for Value and Stability. Within the same industry, it is ranked #10.

Click here to see MRK’s ratings for Growth, Momentum, and Sentiment.

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JNJ shares were trading at $143.12 per share on Monday morning, up $1.06 (+0.75%). Year-to-date, JNJ has declined -1.04%, versus a -1.64% rise in the benchmark S&P 500 index during the same period.