UBS raises Johnson & Johnson stock price target to $320
UBS analysts raised their price target for Johnson & Johnson shares from $280 to $320 per share. The company’s stock ended trading at a record level above $275, extending its winning streak to seven consecutive sessions, CNBC Top News reports.
Since the beginning of the year, Johnson & Johnson shares have risen 33%, while the S&P 500 index has gained 12%. Over the past month, the healthcare sector ranked second in performance among U.S. market sectors, trailing only energy.
UBS arguments
UBS expects Johnson & Johnson’s revenue growth rate to accelerate from its historical annual average of 4–6% to more than 8% over the rest of the decade. Analysts also believe the market may revalue the company as a growth stock, while an increasing share of higher-margin products could support financial performance.
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According to UBS, Johnson & Johnson has one of the best growth and earnings-quality profiles among major pharmaceutical companies. The bank noted that the company has no significant near-term risks of drug exclusivity losses or other binary risks.
Drugs and the Ottava system
UBS named the multiple myeloma drug Darzalex as one of Johnson & Johnson’s key assets. Its U.S. exclusivity expires in 2029. Analysts expect a gradual rather than sharp decline in sales after that and forecast peak annual sales of $22–23 billion for the drug. In the second quarter, Darzalex sales exceeded $4 billion and grew by nearly 18%.
Among other growth drivers, UBS highlighted the immunology drugs Tremfya and Icotyde. Tremfya sales rose 71% in the most recent second quarter. Icotyde is an oral IL-23 inhibitor for the treatment of plaque psoriasis, approved by the FDA in mid-March; analysts estimate its potential peak sales at more than $10 billion. UBS also noted the Ottava robotic surgical system, but said its adoption will take time due to the dominance of Intuitive Surgical’s da Vinci system.
