JNJ Q1 MedTech Preview: Key Drivers and China Headwinds to Watch
Johnson & Johnson's JNJ MedTech division, which spans orthopedics, surgery, cardiovascular and vision care, contributes roughly 36% to the company’s total revenues.
J&J is repositioning its MedTech portfolio toward more innovative, faster-growing areas, most notably cardiovascular. Strategic acquisitions, including Shockwave in 2024 and Abiomed in 2022, have strengthened its presence, making it a leader across four of the largest and fastest-growing cardiovascular intervention markets. Reflecting this momentum, J&J’s Cardiovascular sales increased 15.8% to reach $8.9 billion in 2025.
J&J’s MedTech business has improved in the last three quarters, driven by the acquired cardiovascular businesses, Abiomed and Shockwave, as well as Surgical Vision and wound closure in Surgery. Improvements in J&J’s electrophysiology business also drove the growth. MedTech sales rose 4.3% on an organic basis in 2025.
The MedTech segment is expected to continue seeing strong momentum in three focus areas: Cardiovascular, Surgery and Vision in the first quarter, backed by increased adoption of newly launched products across all three segments.
However, the company continues to face headwinds in China. Sales in China are being hurt by the impact of the volume-based procurement (VBP) program, which is a government-driven cost containment effort in China. Sales in China are likely to have been hurt by the impact of the VBP program in the first quarter.
Last year, J&J announced its intention to separate its Orthopaedics franchise into a standalone orthopedics-focused company called DePuy Synthes. The Orthopaedics franchise has been a slow-growth business for J&J. It had earlier said it expects a transaction to happen around mid-2027. An update is expected on the first-quarter conference call.
On the conference call, investors will also look for updates on the MedTech unit’s outlook for 2026. In January, J&J had said it expects better growth in the MedTech segment in 2026 than 2025 levels, driven by increased adoption of newly launched products across Cardiovascular, Surgery and Vision portfolios. It also expects some additional rounds of VBP impact in China in 2026.
J&J’s Key Competitors in the Medical Devices Market
J&J’s MedTech unit faces strong competition from several major players in the medical device industry, like Medtronic MDT, Abbott, Stryker SYK and Boston ScientificBSX.
While Medtronic has a strong presence in cardiovascular, neuroscience and surgical technologies, Stryker is a global leader in medical technology, specializing in innovative solutions across surgical, neurotechnology, orthopedics and spine care. Boston Scientific markets products for cardiovascular, endoscopy, urology and neuromodulation. Abbott is known for its medical device products across cardiovascular, diagnostics and diabetes care.
JNJ’s Price Performance, Valuation and Estimates
J&J’s shares have outperformed the industry over the past year. The stock has risen 52.8% in the past year compared with15.9% appreciation of the industry.
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From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 20.75 forward earnings, higher than 17.24 for the industry. The stock is also trading above its five-year mean of 15.65.
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The Zacks Consensus Estimate for 2026 earnings has been stable at $11.54 per share over the past 60 days, while that for 2027 earnings has gone up from $12.40 per share to $12.44 over the same time frame.
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J&J has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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SeeThis article originally published on Zacks Investment Research (zacks.com).
