Johnson & Johnson Q4 Preview: Can Earnings Bring Health Care 'Back To Life'?

The healthcare sector will be on watch Wednesday with a highly anticipated earnings report from Johnson & Johnson JNJ before market open.

Earnings Estimates: Analysts expect Johnson & Johnson to report fourth quarter revenue of $22.44 billion according to data from Benzinga Pro.

The company has beaten analyst estimates for revenue in two straight quarters and eight of the last 10 quarters overall.

Analysts expect the company to report fourth quarter earnings per share of $2.00, down from $2.29 in last year's fourth quarter. The company has beaten analyst estimates for earnings per share in 10 straight quarters.

Key Items to Watch: Johnson & Johnson has received several price target cuts from analysts in the last two months.

Bank of America maintained a Neutral rating and lowered the price target from $166 to $160. Citi maintained a Buy rating and lowered the price target from $185 to $175.

Freedom Capital Markets Chief Global Strategist Jay Woods highlighted the importance of Johnson & Johnson's earnings report for the health care sector.

"The health care sector has remained under pressure and those following it are hoping JNJ can help bring it back to life," Woods wrote in a weekly newsletter.

Woods said analysts and investors will be looking for the company's sales of key oncology drugs Darzalex and Carvykti. The market strategist also said investors and analysts will be looking for commentary on the recent acquisition of Cellular Therapies and its impact on the bottom line.

In the third quarter, Darzalex sales were up 22.9% year-over-year to $3.02 billion. Carvykti sales hit $286 million in the third quarter, up 87.6% year-over-year.

Woods highlighted the timing of the fourth-quarter results coming as shares have hit new 52-week lows recently.

"Johnson & Johnson has dropped over -16% from its September peak making new 52-week lows as recently as last week. In fact, over the last 52 weeks, shares are lower by 8%."

With this being the company's fourth quarter, investors and analysts will also be looking for commentary on future guidance.

Johnson & Johnson is a member of the Dow Jones Industrial Average and one of several Dow Jones stocks reporting financial results this week, putting ETFs like the SPDR Dow Jones Industrial Average ETF DIA into focus.

JNJ Price Action: Johnson & Johnson stock is up 1% to $148.43 on Tuesday versus a 52-week trading range of $140.68 to $168.85. The stock is down 9% over the last year.

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