⚠ A AAA Rating With a Negative OutlookLow threat

Johnson & Johnson (JNJ) — threat to the moat

The rating agency that gives J&J its rare AAA rating has had it on negative outlook since the Abiomed and Shockwave deals.

J&J's credit rating is a rare asset. A 2024 report noted that around 60 publicly traded companies held a AAA rating in 1980 and only two still did, J&J among them1. The same report said Standard and Poor's reaffirmed the rating with a negative outlook, pointing to the acquisitions of Abiomed, Laminar and Shockwave as adding to long-term debt2.

Credit standingAAA-rated public companies, 1980about 60AAA-rated public companies, 20242Total debt to total capital, 202434.0%Total debt to total capital, 202537.0%Net debt, June 2026$28.2bnMotley Fool, October 2024 (third-party); J&J 10-K FY2025, 10-Q Q2 2026
A rare rating under pressure.

Since then the leverage has risen further. Total debt went from 34.0% of total capital at the end of 2024 to 37.0% at the end of 20253. J&J's own 10-K says only that it maintains investment grade credit ratings with Moody's and Standard and Poor's4.

A downgrade by one notch would change little in borrowing costs. It would remove one of the few things that visibly distinguishes J&J's balance sheet from its peers'.

The rating has practical value when something goes wrong. A company that can borrow cheaply at short notice can pay a litigation settlement or a large purchase without selling assets or cutting the dividend. J&J funded the $14.5 billion Intra-Cellular purchase largely with approximately $9.2 billion of new senior notes5, a transaction that a lower-rated company would have found more expensive.

The same report said the rating agency pointed to levers J&J has to reduce leverage quickly6, which is why it kept the rating unchanged. The orthopaedics separation is one such lever, if DePuy Synthes leaves with debt; slower buybacks, visible in the second quarter of 2026, are another.

Debt as a share of total capital is the line to follow. Above 40% would put the rating at real risk; below 35% would show the company choosing to protect it.

References
  1. Third-party estimateA 2024 report noted that around 60 publicly traded companies held a AAA rating in 1980 and only two still did, J&J among them.
    The Motley Fool, only two public companies still hold a AAA credit rating - S&P reaffirmed J&J's AAA with a negative outlook (third-party report, October 2024). — 2024 · publ. 24 October 2024 · source ↗
  2. Third-party estimateThe same report said Standard and Poor's reaffirmed the rating with a negative outlook, pointing to the acquisitions of Abiomed, Laminar and Shockwave as adding to long-term debt.
    The Motley Fool, only two public companies still hold a AAA credit rating - S&P reaffirmed J&J's AAA with a negative outlook (third-party report, October 2024). — 2024 · publ. 24 October 2024 · source ↗
  3. ReportedTotal debt went from 34.0% of total capital at the end of 2024 to 37.0% at the end of 2025.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: rebate accrual tables, research and development, cost of products sold, debt and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  4. ReportedJ&J's own 10-K says only that it maintains investment grade credit ratings with Moody's and Standard and Poor's.
    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 ↗
  5. ReportedJ&J funded the $14.5 billion Intra-Cellular purchase largely with approximately $9.2 billion of new senior notes, a transaction that a lower-rated company would have found more expensive.
    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. Third-party estimateThe same report said the rating agency pointed to levers J&J has to reduce leverage quickly, which is why it kept the rating unchanged.
    The Motley Fool, only two public companies still hold a AAA credit rating - S&P reaffirmed J&J's AAA with a negative outlook (third-party report, October 2024). — 2024 · publ. 24 October 2024 · source ↗
Sources
Generated September 24, 2026