Johnson & JohnsonWide moat

JNJ — overall economic moat

Investment snapshot
Wide moat→ Holding steadyConfidenceHighValuationExpensive
Strongest advantageA replacement machine that grew sales 6% in the year its second-largest drug lost 41%, led by a four-product multiple myeloma franchise
Greatest threatPrices set by payers and governments: rebates equal to about 94% of medicines net sales and a price contribution of -3.1 points in 2025
Key metricInnovative Medicine operational growth (+6.8% in Q2 2026 despite ~760bp Stelara drag)
Verdict: Johnson & Johnson's moat is not a product but the machinery that replaces its products: research, a habit of buying what research does not produce, a sales organisation in virtually every country, and a balance sheet that absorbs accidents like talc. It passed its hardest test in 2025. Two things narrow it: prices are increasingly set by payers and governments, and the device half earns about a third of the medicines margin. At about 24 times adjusted earnings guided to grow 2% this year, the shares already price the double-digit growth promised for 2030.
📈 JNJ valuation, revenue & earnings — P/E, P/S, revenue, EPS →

Johnson & Johnson is a medicines company with a medical-device business attached. Incorporated in New Jersey in 18871, it is a holding company with operating companies conducting business in virtually all countries of the world2, and about 138,200 employees3. In 2025 it sold $94,193 million: $60,401 million of medicines through its Innovative Medicine segment and $33,792 million of devices through MedTech4. It earned $26,804 million, or $11.03 a share5.

Sales by segment, 2025 ($M)Innovative Medicine 60,401 — 64%MedTech 33,792 — 36%J&J Form 10-K FY2025
Two-thirds medicines, one-third devices.

Those earnings flatter the year. They include the reversal of approximately $7.0 billion of the talc reserve6. On J&J's adjusted basis, which excludes such items and amortisation, net earnings were $26,215 million and EPS $10.797. Free cash flow was about $19.7 billion8.

How it makes money is simple to state. It discovers or buys a medicine, sells it at a price negotiated against payers and governments for as long as the patents last, and replaces it before the copies arrive. Oncology is now the largest area, $25,380 million in 2025, up 22.1%9. Darzalex, a multiple myeloma treatment licensed from Genmab, was approximately 15.0% of total revenues10. The devices business sells surgery, orthopaedics, cardiovascular and vision products to hospitals and eye care professionals11, and earns far less: 12.2% before tax against 36.9% for medicines12.

The company has changed shape. It separated its consumer business as Kenvue in 202313, and in October 2025 announced it would separate orthopaedics as DePuy Synthes14. It has bought heavily to fill its pipeline: Abiomed, Shockwave, Intra-Cellular and Halda among others, with acquisitions of $15.1 billion in 2024 and $17.5 billion in 202515. It has raised its dividend for 64 consecutive years16.

2025 was the test of whether the model still works. Stelara, formerly its second-largest drug, lost 41.3% of its sales to biosimilars17; J&J grew 6.0% anyway, with volume up 8.4 points and price down 3.118. In the second quarter of 2026 sales rose 6.6% to $25,310 million19, and the company expects more than $100 billion of revenue in 2026 for the first time20.

The shares were $270.57 on 24 September 2026, a market value of $652.05 billion21, about 31 times trailing GAAP earnings and 24 times forward22.

The shape of the company shows most clearly in where it sells and where it keeps its assets. The United States bought $53,752 million of the 2025 total, Europe $21,535 million, Asia-Pacific and Africa $14,031 million and the rest of the Western Hemisphere $4,875 million23. Long-lived assets in the United States rose from $70,670 million to $89,392 million in a single year24, largely because the Intra-Cellular purchase landed there. More than half the sales and nearly three-quarters of the long-lived assets now sit in one country whose government is also a major payer for J&J's products and, since January 2026, the party that granted its medicines a tariff exemption25.

The ownership is as ordinary as the business is not. There were 108,358 record holders of the common stock in February 202626, institutions own about 76% and the shares have a five-year beta of 0.2327: the market treats J&J as one of its least volatile large companies, which is part of what a 64-year dividend record buys.

The moat is wide, and it lives in the machinery that replaces products rather than in any product. The number that would falsify that is Innovative Medicine operational growth, 6.8% in the second quarter of 2026 despite Stelara28; a full year of decline as Simponi, Opsumit and, in 2029, Darzalex lose protection would say the machinery can no longer outrun the expiries.

The number that tests this moat
Reported
Revenue, and where it comes from
$94.2bn in 2025: Innovative Medicine $60.4bn (64%), MedTech $33.8bn

Medicines earn about 84% of segment profit. Watch Innovative Medicine operational growth through the next patent expiries.

Source: Johnson & Johnson Form 10-K, FY2025 ↗
Moat scorecardHow ratings work →
Switching costs6/10
Network effects3/10
Pricing power5/10
Hard to replicate8/10
Disruption resistance7/10
Overall durability8/10

Replication scores highest because the combination of a six-area research engine, a global commercial organisation and the cash to buy science is very hard to assemble; a biosimilar can copy one molecule but not the machine that replaces it. Disruption resistance is high because no single product or project dominates research spending. Pricing power is middling and falling: payers take rebates equal to about 94% of medicines net sales and price subtracted 3.1 points from growth in 2025. Switching costs are real in devices, where surgeons train on J&J systems, and in disease areas like myeloma where J&J products are combined. Network effects are limited. Durability sits in the wide band because the replacement machine has now been tested under load.

Dig deeper
DIG DEEPER 01
The Revenue Lines
J&J sells 36% of its revenue as devices, but earns about 84% of its segment profit from medicines.
DIG DEEPER 02
The Moat
J&J's moat is not a product but the machinery that replaces its products, and 2025 proved it by absorbing a 41% collapse in its second-largest drug.
DIG DEEPER 03
Competitors
J&J's annual report names no competitor, but its rivals include the company that owns the patents on its biggest drug.
DIG DEEPER 04
Major Clients
J&J's three largest wholesalers handle nearly half its gross revenue, but the customers who matter are the payers who take $57 billion a year in…
✦ Future bets — beyond today's moat
✦ FUTURE BET 01
The Future Bets
J&J wants double-digit growth by the end of the decade and is paying for the attempt with $1.36 of next year's earnings per share.
⚠ Threats to the moat
⚠ THREAT 01
Talc: Fifteen Years and a $5.5 Billion Offer
J&J has offered $5.5 billion to end fifteen years of talc litigation, and the deal only works if 95% of claimants take it.
⚠ THREAT 02
The Price Is Now Set Elsewhere
J&J now grows by selling more medicine at lower prices: price took 3.1 points off its growth in 2025.
◆ What the market may be missing
◆ THE VARIANT VIEW
What the Market Isn't Pricing In
J&J's market value rose 87% in under two years while its adjusted earnings are guided to grow about 2% this year.
◆ THE VARIANT VIEW
Inside the Latest Quarter (Q2 2026)
J&J's second quarter showed Tremfya selling nearly three times as much as Stelara, and then two deals cut the year's guidance.
References
  1. ReportedIncorporated in New Jersey in 1887, it is a holding company with operating companies conducting business in virtually all countries of the world, and about 138,200 employees.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1 business: segments, competition, patents, the three largest products, royalties, collaboration partners and the regulatory table. — FY2025 · publ. 11 February 2026 · source ↗
  2. ReportedIncorporated in New Jersey in 1887, it is a holding company with operating companies conducting business in virtually all countries of the world, and about 138,200 employees.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1 business: segments, competition, patents, the three largest products, royalties, collaboration partners and the regulatory table. — FY2025 · publ. 11 February 2026 · source ↗
  3. ReportedIncorporated in New Jersey in 1887, it is a holding company with operating companies conducting business in virtually all countries of the world, and about 138,200 employees.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1 business: segments, competition, patents, the three largest products, royalties, collaboration partners and the regulatory table. — FY2025 · publ. 11 February 2026 · source ↗
  4. ReportedIn 2025 it sold $94,193 million: $60,401 million of medicines through its Innovative Medicine segment and $33,792 million of devices through MedTech.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: MedTech segment and franchise sales analysis. — FY2025 · publ. 11 February 2026 · source ↗
  5. ReportedIt earned $26,804 million, or $11.03 a share.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: consolidated sales, volume and price, geography, the three wholesalers, rebate accruals, costs, R&D and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  6. ReportedThey include the reversal of approximately $7.0 billion of the talc reserve.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1A risk factors, Note 19 legal proceedings (talc, Innovative Health, Auris, Tracleer) and the Inflation Reduction Act. — FY2025 · publ. 11 February 2026 · source ↗
  7. ReportedOn J&J's adjusted basis, which excludes such items and amortisation, net earnings were $26,215 million and EPS $10.79.
    Johnson & Johnson fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - adjusted earnings, free cash flow and 2026 guidance. — FY2025 · publ. 21 January 2026 · source ↗
  8. ReportedFree cash flow was about $19.7 billion.
    Johnson & Johnson fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - adjusted earnings, free cash flow and 2026 guidance. — FY2025 · publ. 21 January 2026 · source ↗
  9. ReportedOncology is now the largest area, $25,380 million in 2025, up 22.1%.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: Innovative Medicine segment, therapeutic-area and product sales analysis. — FY2025 · publ. 11 February 2026 · source ↗
  10. ReportedDarzalex, a multiple myeloma treatment licensed from Genmab, was approximately 15.0% of total revenues.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1 business: segments, competition, patents, the three largest products, royalties, collaboration partners and the regulatory table. — FY2025 · publ. 11 February 2026 · source ↗
  11. ReportedThe devices business sells surgery, orthopaedics, cardiovascular and vision products to hospitals and eye care professionals, and earns far less: 12.2% before tax against 36.9% for medicines.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - financial statements and notes: income statement, balance sheet, cash flows, equity, segment income, acquisitions and geographic assets. — FY2025 · publ. 11 February 2026 · source ↗
  12. ReportedThe devices business sells surgery, orthopaedics, cardiovascular and vision products to hospitals and eye care professionals, and earns far less: 12.2% before tax against 36.9% for medicines.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - financial statements and notes: income statement, balance sheet, cash flows, equity, segment income, acquisitions and geographic assets. — FY2025 · publ. 11 February 2026 · source ↗
  13. ReportedIt separated its consumer business as Kenvue in 2023, and in October 2025 announced it would separate orthopaedics as DePuy Synthes.
    Johnson & Johnson Form 10-K for fiscal 2023 - the Kenvue initial public offering and exchange offer, and 2021-2022 restated to continuing operations. — FY2023 · publ. February 2024 · source ↗
  14. ReportedIt separated its consumer business as Kenvue in 2023, and in October 2025 announced it would separate orthopaedics as DePuy Synthes.
    Johnson & Johnson announcement of its intent to separate the Orthopaedics business (DePuy Synthes), Form 8-K exhibit 99.3. — October 2025 · publ. 14 October 2025 · source ↗
  15. ReportedIt has bought heavily to fill its pipeline: Abiomed, Shockwave, Intra-Cellular and Halda among others, with acquisitions of $15.1 billion in 2024 and $17.5 billion in 2025.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: MedTech segment and franchise sales analysis. — FY2025 · publ. 11 February 2026 · source ↗
  16. ReportedIt has raised its dividend for 64 consecutive years.
    Johnson & Johnson announcement of its 64th consecutive annual dividend increase, Form 8-K exhibit 99.3. — April 2026 · publ. 14 April 2026 · source ↗
  17. ReportedStelara, formerly its second-largest drug, lost 41.3% of its sales to biosimilars; J&J grew 6.0% anyway, with volume up 8.4 points and price down 3.1.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: Innovative Medicine segment, therapeutic-area and product sales analysis. — FY2025 · publ. 11 February 2026 · source ↗
  18. ReportedStelara, formerly its second-largest drug, lost 41.3% of its sales to biosimilars; J&J grew 6.0% anyway, with volume up 8.4 points and price down 3.1.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: Innovative Medicine segment, therapeutic-area and product sales analysis. — FY2025 · publ. 11 February 2026 · source ↗
  19. ReportedIn the second quarter of 2026 sales rose 6.6% to $25,310 million, and the company expects more than $100 billion of revenue in 2026 for the first time.
    Johnson & Johnson second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 15 July 2026 · source ↗
  20. ReportedIn the second quarter of 2026 sales rose 6.6% to $25,310 million, and the company expects more than $100 billion of revenue in 2026 for the first time.
    Johnson & Johnson second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 15 July 2026 · source ↗
  21. ReportedThe shares were $270.57 on 24 September 2026, a market value of $652.05 billion, about 31 times trailing GAAP earnings and 24 times forward.
    Johnson & Johnson (JNJ) market data - $270.57 a share on 24 September 2026, market cap $652.05B, dividend $5.36 (1.98%), 52-week range 175.74-281.07. — September 2026 · publ. 24 September 2026 · source ↗
  22. ReportedThe shares were $270.57 on 24 September 2026, a market value of $652.05 billion, about 31 times trailing GAAP earnings and 24 times forward.
    Johnson & Johnson (JNJ) statistics - trailing P/E 31.20, forward P/E 24.03, 2.41 billion shares outstanding, 52-week price change +53.30%, 64 years of dividend growth, analyst target $277.91. — September 2026 · publ. 24 September 2026 · source ↗
  23. ReportedThe United States bought $53,752 million of the 2025 total, Europe $21,535 million, Asia-Pacific and Africa $14,031 million and the rest of the Western Hemisphere $4,875 million.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: consolidated sales, volume and price, geography, the three wholesalers, rebate accruals, costs, R&D and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  24. ReportedLong-lived assets in the United States rose from $70,670 million to $89,392 million in a single year, largely because the Intra-Cellular purchase landed there.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: consolidated sales, volume and price, geography, the three wholesalers, rebate accruals, costs, R&D and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  25. ReportedMore than half the sales and nearly three-quarters of the long-lived assets now sit in one country whose government is also a major payer for J&J's products and, since January 2026, the party that granted its medicines a tariff exemption.
    Johnson & Johnson press release: agreement with the United States government on drug prices, Medicaid access, TrumpRx and a tariff exemption. — January 2026 · publ. 8 January 2026 · source ↗
  26. ReportedThere were 108,358 record holders of the common stock in February 2026, institutions own about 76% and the shares have a five-year beta of 0.23: the market treats J&J as one of its least volatile large companies, which is part of what a 64-year dividend record buys.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1 business: segments, competition, patents, the three largest products, royalties, collaboration partners and the regulatory table. — FY2025 · publ. 11 February 2026 · source ↗
  27. ReportedThere were 108,358 record holders of the common stock in February 2026, institutions own about 76% and the shares have a five-year beta of 0.23: the market treats J&J as one of its least volatile large companies, which is part of what a 64-year dividend record buys.
    Johnson & Johnson (JNJ) statistics - trailing P/E 31.20, forward P/E 24.03, 2.41 billion shares outstanding, 52-week price change +53.30%, 64 years of dividend growth, analyst target $277.91. — September 2026 · publ. 24 September 2026 · source ↗
  28. ReportedThe number that would falsify that is Innovative Medicine operational growth, 6.8% in the second quarter of 2026 despite Stelara; a full year of decline as Simponi, Opsumit and, in 2029, Darzalex lose protection would say the machinery can no longer outrun the expiries.
    Johnson & Johnson second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 15 July 2026 · source ↗
Sources
Generated September 24, 2026