The Zacks Analyst Blog Highlights Johnson & Johnson and Pfizer

For Immediate ReleaseChicago, IL – April 4, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Johnson & Johnson JNJ and Pfizer PFE.Here are highlights from Thursday’s Analyst Blog:J&J vs. Pfizer: Which Big Pharma Stock Is the Better Buy Today?Johnson & Johnson and Pfizer are two of the world's largest pharmaceutical companies with diversified healthcare portfolios. J&J operates through pharmaceuticals and medical devices divisions. In Pharmaceuticals, it has one of the most diverse revenue streams in the industry, covering a broad range of areas such as neuroscience, cardiovascular and metabolism, immunology, oncology, pulmonary hypertension and infectious diseases. On the other hand, Pfizer holds a leading position in the oncology segment while also enjoying a strong presence in inflammation & immunology, rare disease and vaccines.Both companies have interesting R&D pipelines that can generate innovative products and further drive growth. But which one is a better investment today? Let's take a closer look at their fundamentals, growth prospects and challenges to make an informed choice.The Case for J&JJ&J's biggest strength is its diversified business model, which helps it to withstand economic cycles more effectively. It operates through more than 275 subsidiaries.J&J's Innovative Medicine unit is showing a growth trend. The segment's sales rose 5.8% in 2024 on an organic basis. In 2025, J&J expects growth in the Innovative Medicine segment despite the loss of exclusivity (LOE) for its multi-billion-dollar product Stelara, the negative impact of the Part D redesign and the greater effect of currency fluctuations. Growth is expected to be driven by its key products, such as Darzalex, Tremfya, Spravato and Erleada, as well as new drugs like Carvykti, Tecvayli and Talvey, and new indications for Tremfya and Rybrevant.J&J is also making rapid progress with its pipeline and has been on an acquisition spree lately, which has strengthened its pipeline.On the flip side, sales in J&J's MedTech business are facing continued headwinds in the Asia Pacific, specifically in China. Sales in China are being hurt by the impact of the volume-based procurement (VBP) program and the anti-corruption campaign. J&J does not expect any improvement in its business in the Asia Pacific region, specifically in China, in 2025. Competitive pressure is also hurting sales growth in some MedTech businesses.The company lost U.S. patent exclusivity of its blockbuster drug, Stelara, in 2025. Stelara generated sales of $10.36 billion in 2024. The launch of generics is expected to significantly erode the drug's sales, hurting J&J's sales and profits in 2025.J&J faces more than 62,000 lawsuits for its talc-based products, primarily its baby powders. The lawsuits allege that its talc products contain asbestos, which caused many women to develop ovarian and some other cancers. Earlier this week, a bankruptcy court in Texas rejected J&J's proposed bankruptcy plan to settle its talc lawsuits. J&J will go back to the traditional tort system to fight the lawsuits individually with its bankruptcy strategy to settle the lawsuits failing for the third time.It exited 2024 with cash and cash equivalents of $24.5 billion against a long-term debt of 30.65 billion, resulting in a debt-to-capital ratio of 0.3, which is less than the industry's average of 0.41.The Case for PFEPfizer is one of the largest and most successful drugmakers in oncology. The 2023 acquisition of Seagen strengthened its position in oncology further.After witnessing possibly its worst slowdown in 2023/early 2024, the company seems to be gradually making a comeback and entering a transition phase. With its COVID-related uncertainties diminishing, its revenue volatility is declining.Though COVID revenues are declining, its non-COVID drugs and contributions from new and newly acquired products have started to drive growth. Revenues from Pfizer's non-COVID products rose 12% operationally in 2024, exceeding the guidance range of 9-11%.The continued growth of Pfizer's diversified portfolio of drugs, particularly in oncology, is expected to support top-line growth in 2025. Also, Pfizer expects cost cuts and internal restructuring to deliver savings of at least $6.0 billion. Continued growth in non-COVID sales and significant cost-reduction measures should drive profit growth.Pfizer faces its share of challenges, the key being declining sales of its COVID-19 products. Pfizer also expects a significant impact from the loss of patent exclusivity in the 2026-2030 period, as several of its key products will face patent expirations. The Medicare Part D redesign is also expected to hurt sales of Pfizer's higher-priced drugs like Vyndaqel, Ibrance and Xeljanz in 2025.As of Dec. 31, 2024, Pfizer had cash and cash equivalents of $20.48 billion on its balance sheet and $57.4 billion in long-term debt. Its debt-to-capital ratio of 0.42 is almost in line with the industry's average of 0.41.How Do Estimates Compare for JNJ & PFE?The Zacks Consensus Estimate for J&J's 2025 sales and EPS implies a year-over-year increase of 1.4% and 6.0%, respectively. The EPS estimates for 2025 and 2026 have been stable at $10.58 per share and $11.07 per share, respectively, over the past 60 days.The Zacks Consensus Estimate for Pfizer's 2025 sales and EPS implies a year-over-year decline of 0.7% and 4.5%, respectively. EPS estimates for both 2025 and 2026 have been trending northward over the past 60 days.Price Performance and Valuation of J&J & PFEYear to date, J&J's stock has risen 8.3%, while Pfizer's stock has declined 5.4% compared with the industry's increase of 1.6%.Pfizer looks more attractive than J&J from a valuation standpoint.Going by the price/earnings ratio, Pfizer's shares currently trade at 8.30 forward earnings, significantly lower than 15.78 for the industry and the stock's 5-year mean of 11.07.J&J's shares currently trade at 14.51 forward earnings, slightly lower than the industry.Johnson & Johnson's dividend yield is 3.2%, while Pfizer's is around 7%. Johnson & Johnson's return on equity of 34.2% is higher than Pfizer's 19.6%.PFE or JNJ: Which is a Better Pick?Both Pfizer & J&J have a Zacks Rank #3 (Hold), which makes choosing one stock a difficult task. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Both companies expect their sales and profits to improve in 2025.J&J has shown steady revenue and EPS growth for years. Though J&J's Innovative Medicines unit is showing a growing trend, the softness in the MedTech unit is a concern. The legal battle surrounding its talc lawsuits has created a bearish sentiment around the stock.Pfizer, on the other hand, with its improving growth prospects, rising estimates, cheaper valuation and higher dividend yield, may prove to be a slightly better bargain for near-term investors looking to invest in drug/biotech stocks with higher growth potential.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.com                                      https://www.zacks.com                                                 Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Johnson & Johnson (JNJ): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks