ETFs in Focus Submit JNJ Q3 Earnings Beat, Goal Worth Hike

Johnson & Johnson JNJ infused optimistic optimism for the broader healthcare sector after posting strong third-quarter 2024 earnings on Oct. 15. The world’s greatest healthcare merchandise maker continued with its lengthy streak of earnings beat and in addition beat income estimates. Impressed with the earnings outcomes, just a few analysts raised their goal worth on the inventory.

Given this, buyers ought to faucet the corporate’s development prospects by ETFs with the biggest allocation to this diversified drug maker. These embrace iShares U.S. Prescribed drugs ETF IHE, iShares U.S. Healthcare ETF IYH, First Belief Nasdaq Prescribed drugs ETF FTXH, Well being Care Choose Sector SPDR Fund XLV and VanEck Vectors Pharmaceutical ETF PPH.

Earnings per share got here in at $2.42, beating the Zacks Consensus Estimate of $2.22 and effectively forward of the year-ago earnings of $2.66. Revenues grew 5.2% yr over yr to $22.5 billion and outpaced the Zacks Consensus Estimate of $22.19 billion (see: all the Healthcare ETFs here).

Progressive Medicines gross sales superior 4.9%, whereas gross sales from MedTech gadgets jumped 5.8%. Gross sales of JNJ’s top-selling blood most cancers remedy, Darzalex, jumped 20.7% to $3.02 billion. Nonetheless, gross sales of the blockbuster psoriasis drug Stelara declined 6.6% to $2.68 billion as a result of launch of the biosimilar model in sure European markets in July. A number of biosimilar variations of Stelara are anticipated to be launched in america in 2025. Imbruvica gross sales declined 6.8% to $753 million as a brand new oral drug intensified competitors.

For 2024, Johnson & Johnson raised its steerage for the third consecutive quarter from $89.2-$89.6 billion to $89.4-$89.8 billion, indicating year-over-year development of 6.3%-6.8%. However, the corporate lowered its adjusted earnings per share steerage from $9.97-$10.07 to $9.88-$9.98.

Analysts Raise Goal Worth

A couple of analysts have raised the goal worth on the shares following the outcomes. Analyst at Stifel Monetary boosted the goal worth for J&J to $170 from $160, sustaining a Maintain score on the inventory. RBC Capital Markets lifted the goal worth to $181.00 from $178.00 whereas sustaining an Outperform score on the inventory (learn: Inside the Booming Obesity Drug Market: Weight Loss ETFs to Win).

JNJ has a Wall Road common goal worth of $172.67, starting from a low of $150.00 to a excessive of $215.00.

ETFs in Focus

iShares U.S. Prescribed drugs ETF (IHE)

iShares U.S. Prescribed drugs ETF gives publicity to 38 firms that manufacture prescription or over-the-counter medicine or vaccines by monitoring the Dow Jones U.S. Choose Prescribed drugs Index. Of those, Johnson and Johnson takes the second prime spot, accounting for a 22% share.

iShares U.S. Prescribed drugs ETF has $661.3 million in AUM and costs 39 bps in charges and bills. Quantity is decrease because it exchanges about 25,000 shares a day. The fund has a Zacks ETF Rank #3 (Maintain) with a Excessive danger outlook.

iShares U.S. Healthcare ETF (IYH)

iShares U.S. Healthcare ETF provides publicity to 107 U.S. healthcare gear and companies, prescribed drugs, and biotechnology firms by monitoring the Russell 1000 Well being Care RIC 22.5/45 Capped Gross Index. Johnson and Johnson is the third agency, accounting for six.8% of the full property. When it comes to industrial publicity, pharma takes the highest spot at 31.6%, adopted by healthcare gear (19.6%) and biotech (18.2%).

iShares U.S. Healthcare ETF has amassed $3.4 billion in its asset base whereas charging 39 bps in annual charges. It trades in a average quantity of round 227,000 shares a day and has a Zacks ETF Rank #3 with a Medium danger outlook.

First Belief Nasdaq Prescribed drugs ETF (FTXH)

First Belief Nasdaq Prescribed drugs ETF provides publicity to U.S. firms throughout the prescribed drugs trade and tracks the Nasdaq US Good Prescribed drugs Index. It holds 50 securities in its basket, with JNJ occupying the third spot at 7.3% of the property. FTXH has a decrease AUM of $17.3 million and a median day by day quantity of 4,000 shares.

First Belief Nasdaq Prescribed drugs ETF costs 60 bps in annual charges and has a Zacks ETF Rank #3.

Well being Care Choose Sector SPDR Fund (XLV)

Well being Care Choose Sector SPDR Fund is the preferred healthcare ETF and follows the Well being Care Choose Sector Index. It holds 62 securities in its basket, with JNJ taking the third spot at 7% of the property. Pharma, healthcare suppliers and companies, and healthcare gear & provides take the biggest share at 31.8%, 21.1% and 20.5%, respectively.

Well being Care Choose Sector SPDR Fund manages $41.9 billion in its asset base and trades in a heavy quantity of round 6 million shares. The expense ratio is available in at 0.09%. It has a Zacks ETF Rank #1 (Sturdy Purchase) with a Medium danger outlook (learn: Sector ETFs & Stocks to Gain On Upbeat September Jobs Data).

VanEck Vectors Pharmaceutical ETF (PPH)

VanEck Vectors Pharmaceutical ETF follows the MVIS US Listed Pharmaceutical 25 Index, which measures the efficiency of firms concerned in prescribed drugs, together with pharmaceutical analysis and growth in addition to manufacturing, advertising and marketing and gross sales of prescribed drugs. It holds 26 shares in its basket, with Johnson and Johnson occupying the third place at 6.6% of property.

VanEck Vectors Pharmaceutical ETF has amassed $727.9 million in its asset base and trades in quantity of about 146,000 shares a day. The expense ratio is 0.36%. VanEck Vectors Pharmaceutical ETF has a Zacks ETF Rank #2 (Purchase) with a Medium danger outlook.