Shares of Johnson & Johnson slid Tuesday after the pharma giant reported another solid but imperfect quarter. But with key growth drivers, including psoriasis drug Icotyde, gaining traction, the sell-off presents a gift to long-term investors. Revenue in the third quarter rose 5.9% to $25.4 billion, topping the consensus of $25.28 billion, according to LSEG. Adjusted earnings per share (EPS) in the July-to-September period totaled $2.59, exceeding expectations by 5 cents, LSEG data showed. On a year-over-year basis, adjusted EPS declined 7.5%, partially reflecting charges related to business development deals completed during the quarter. J & J is down more than 6% and pacing for its worst day since April 2025. Jim Cramer warned, going into the quarter, that J & J has historically traded poorly on its earnings days, and what we’re seeing Tuesday certainly aligns with that trend. The pullback isn’t totally unfounded given the problems in its medical devices business. But that shortfall obscured the strong performance and positive outlook of J & J’s largest segment, Innovative Medicine. As a result, we’re reiterating our buy-equivalent 1 rating and $275 price target. JNJ 1Y mountain J & J 1-year return Bottom line The stock probably deserves to be down, but not this much — even in this unforgiving market. J & J remains the class of the healthcare industry, with a strong product portfolio and pipeline. “The number of drugs they have is extraordinary,” Jim Cramer said on Tuesday’s Morning Meeting . “The billion-dollar blockbusters that are in the queue, amazing, and that’s why you buy this stock right here,” Jim said on Tuesday’s Morning Meeting. “There’s going to be a December meeting where, I think, a lot of this is going to be spelled out. … You buy 100 shares here. If it goes down another 5%, you buy another 100 shares. This is Johnson & Johnson.” This is not a stock used to one-day moves of this size. The last time the stock fell at least 3.5% in a single session was July 30, the day the company cut its full-year earnings guidance to reflect its acquisition of Firefly Bio and a strategic collaboration with Sail Biomedicines. At the time, we argued the market reaction was a nothing-burger because it wasn’t a cut due to the company’s performance. This time around, some of the selling is due to performance, specifically within its MedTech segment, where its cardiovascular business disappointed again and its surgery business faced pressures abroad in the Middle East and China. While we won’t pretend to like seeing these hiccups, they don’t rise to the level of changing our thesis for a couple of reasons. Some of the problems are beyond the company’s control: the fallout from the war in the Middle East and Chinese government policies. In the case of the Middle East, specifically, executives said they expect this to be a case of deferred sales, not lost revenue. Plenty of other healthcare companies are being hurt by China’s volume-based…
Read More: J&J falls 6% on an imperfect quarter. Why this is a good chance to buy