The global healthcare market is on track to hit more than $665 billion in the next three years, as patients seek treatment for everything from brain aneurysms to broken arms. In 2024, global spending on Band-Aids alone was estimated at $5.2 billion.
The company that invented Band-Aids in 1920, storied drug and medical device maker Johnson & Johnson (NYSE: JNJ), spun off its adhesive bandage unit in 2023. That was part of its move from stable, slow-growing consumer health products to high-growth pharmaceutical and medical device segments.
Now focused on innovations such as robotic surgical assistants and artificial intelligence-powered medical tools, Johnson & Johnson has seen its stock rise 21% so far this year.
Overcoming tariff worries and other concerns
JNJ stock dropped in April and part of May over tariff fears, looming lawsuits, and loss of patent protections on some of its most profitable drugs.
Other concerns included potential U.S. government price limits on some popular drugs, and ongoing lawsuits related to former talcum products, such as baby powder.
Second-quarter earnings put the patent concerns to rest, as the company’s biopharma segment posted record-high revenue of more than $15 billion, and annual guidance was increased. Tariff worries subsided with an August announcement of a $2 billion investment to keep the majority of JNJ’s production in the U.S.
One segment with massive potential for growth is the medical device business. JNJ is testing a system called Ottava — robotic-assisted surgery equipment that allows doctors to perform minimally invasive surgical procedures rather than riskier traditional open surgeries.
The system is in clinical trials now. If approved, it would allow Johnson & Johnson access to a market where just 5% of potential procedures are completed with robotic assistance devices.
Earnings data
The company reported higher-than-expected earnings per share in the second quarter, with sales of $23.7 billion, up 4.6% from a year earlier, adjusting for currency effects. JNJ increased its sales and profit forecasts for 2025 as a whole.
The company raised its dividend in May for the 62nd year in a row.. Several analysts recommend the stock as a dividend investment, noting that its forward dividend yield of 2.91% is well above the median yield for the healthcare sector. That can help stabilize a stock during market downturns.
Despite its promising signs, the healthcare market remains unpredictable. Clinical trials can fail, regulatory and government interventions on pricing or tariffs can worsen, new legal liabilities can emerge, and old ones can return. But with the potential for new medical technology and promising earnings growth, Johnson & Johnson stock looks quite healthy.
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