Johnson & Johnson (NYSE:JNJ) will report its Q4 2016 earnings on Tuesday, January 24th. We expect mild growth driven primarily by the pharma business, which continues to benefit from the growth in its two key franchises: Immunology and Oncology. One of the biggest concerns is how Inflectra's launch will impact Remicade's sales. While there is no doubt that it will eventually cause Remicade's sales to decline, the impact in the fourth quarter will be very limited. Overall, J&J is facing a challenging environment, with multiple drugs nearing maturity and medical business reeling under competitive pressure. Therefore, a lot rides on new product launches and the company's pipeline as far as the next few years are concerned. Our price estimate of $115 for Johnson & Johnson is roughly in line with the market. Here is what we can expect from the company's Q4 2016 earnings.
First. We believe that the key growth drivers will continue to be the same. They include new oncology drugs such as Darzalex and Imbruvica, which have a combined peak sales potential of $10 billion, along with immunology drugs Simponi and Stelara, and blood thinner Xarelto. We note that Xarelto's growth may moderate slightly due to growing competition from Bristol-Myers Squibb and Pfizer's Eliquis.
