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Johnson & Johnson shares maintain outperform rating at RBC on TREMFYA potential

Published 22/05/2024, 16:08

On Wednesday, RBC Capital maintained its positive stance on Johnson & Johnson (NYSE:JNJ (NYSE:JNJ)), reiterating an Outperform rating with a price target of $175.00.

The affirmation follows Johnson & Johnson's recent analyst meeting, held on Tuesday, where the company discussed encouraging data from the 2024 Digestive Disease Week concerning their drugs TREMFYA for Crohn's Disease (CD) and Ulcerative Colitis (UC).

The company has recently filed for approval of TREMFYA as a treatment for Ulcerative Colitis in March 2024 and plans to file for Crohn's Disease before the end of 2024 in the United States.

Johnson & Johnson anticipates that TREMFYA could generate over $1 billion in annual sales. This estimate is deemed conservative by RBC Capital, given that Stelara, a comparable drug, achieved sales of $10.89 billion in 2023, with 75% of that coming from Inflammatory Bowel Disease treatments.

The latest trial results for TREMFYA have shown it to be superior in effectiveness, which bolsters the drug's potential to be a significant asset for Johnson & Johnson's pharmaceutical division. The company expects TREMFYA to contribute to its projected 5-7% operational long-range plan growth from 2025 to 2030.

RBC Capital's reiterated rating and price target reflect confidence in Johnson & Johnson's pharmaceutical pipeline and the expected growth trajectory based on the performance and potential of TREMFYA. The company's stock continues to be watched closely by investors as it progresses with regulatory filings and commercialization plans for its treatments.

InvestingPro Insights

As Johnson & Johnson (NYSE:JNJ) makes strides with its drug TREMFYA for Crohn's Disease and Ulcerative Colitis, it's worth noting that the company's financial health and market performance are solid indicators of its ability to support such ambitious projects. With a robust market capitalization of $363.99 billion and an attractive P/E ratio of 9.75, Johnson & Johnson stands as a substantial presence in the pharmaceutical industry. The company's commitment to shareholder returns is evident from its 54-year streak of maintained dividend payments, a testament to its financial resilience and strategic planning. Moreover, the stock's low price volatility and position near its 52-week low suggest a potential entry point for long-term investors.

For those looking to delve deeper into the company's financials and stock performance, InvestingPro offers additional insights. With a dividend yield of 3.28% and a consistent dividend growth rate of 9.73%, Johnson & Johnson demonstrates its dedication to rewarding shareholders. The company's operational efficiency is highlighted by an operating income margin of 27.53% over the last twelve months as of Q1 2024. For more detailed analysis and to uncover further InvestingPro Tips, such as Johnson & Johnson's ability to cover interest payments with its cash flows, investors can explore the platform and use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 9 additional InvestingPro Tips available, there's a wealth of information waiting to be discovered to inform investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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