J&J Q4 - Decent but not exciting

Johnson & Johnson reported quarterly results last week for the period ending December 2024. At first glance they looked solid, with decent revenue gains in both their pharma and their medical device units.

Sadly, negative comments from the management team about 2025 profits resulted in a 2% stock selloff on the day. Their gripes included a key cancer drug coming off patent, foreign exchange effects, the ongoing talcum powder lawsuit, slow elective surgeries in China, and pushback on drug prices from Medicare.

The Johnson & Johnson share price has literally gone sideways for the last 5 years. The chart looks like an upturned plate (see below). The only ameliorating factor is that dividends were paid out at a steady rate of 3% per annum over the period.

We hope to buy and hold companies that are transformative, changing the world and growing sales rapidly. Unfortunately, Johnson & Johnson has failed us in this regard. We had hoped that they would develop multiple new blockbuster drugs by now.

We can do better. We suggest that you sell Johnson & Johnson and use the proceeds to buy Eli Lilly shares (unless you have a lot of the latter already, in which case we will propose an alternative).