Should I buy Johnson & Johnson shares ahead of third-quarter earnings results?

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Oct 17, 2021
  • Johnson & Johnson will announce third-quarter results on Tuesday
  • JNJ shares remain in a bull market
  • COVID-19 vaccine revenue should continue to grow

Johnson & Johnson (NYSE: JNJ) shares have weakened from their recent highs above $180, and the current share price stands at $161. Johnson & Johnson is scheduled to announce third-quarter earnings results on Tuesday, October 19th, before the market opens, and according to estimates, the company should post strong earnings results.

Johnson & Johnson continues to move in the right direction

Johnson & Johnson will announce third-quarter earnings results on Tuesday, and it is important to say that the consensus EPS estimate stands at $2.38. The company’s stability in a variety of market conditions has revealed its true staying power, while multiple fast-growing drugs in Johnson & Johnson’s portfolio should continue to drive revenue growth.

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Johnson & Johnson has proven improvements throughout the second quarter of 2021; total revenue has increased by 27.1% Y/Y to $23.31 billion, while the GAAP EPS was $2.35. Johnson & Johnson reported that the company’s single-shot COVID-19 vaccine generated $164 million in sales during the second quarter, but COVID-19 vaccine revenue should grow in the third quarter.

According to the latest news, FDA has unanimously voted to endorse the COVID-19 booster shot developed by Johnson & Johnson. The company’s management reported:

FDA’s Vaccines and Related Biological Products Advisory Committee (VRBPAC) has voted 19–0 to recommend the vector-based shot for people aged 18 years and older at least two months from the initial dose. An FDA decision is likely to benefit more than 15 million U.S. adults who have already received Johnson & Johnson initial vaccine dose.

Joseph Wolk, Executive Vice President, and Chief Financial Officer, said that Johnson & Johnson should have further growth and value creation not just in 2021, but more importantly, for 2022 and beyond.

Johnson & Johnson raised its outlook for the fiscal 2021 year and expects revenue between $92.5 billion -$93.3 billion, while the EPS should be in the range of $9.50 to $9.60.

JNJ shares remain in a bull market

According to rules of technical analysis, Johnson & Johnson shares remain in a bull market, and if the company posts strong third-quarter earnings results on Tuesday, the share price could be above the current levels.

Data source: tradingview.com

The important support levels are $155 and $150; $170 and $180 represent the current resistance levels. If the price jumps above $165, it would be a signal to trade Johnson & Johnso shares, and the next target could be around $170 resistance.

On the other side, if the price falls below $155 support, it would be a strong “sell” signal, and the next target could be around $150.

Summary

Johnson & Johnson is scheduled to announce third-quarter earnings results on Tuesday, October 19th, before the market opens, and if the company posts strong results, the share price could be above the current levels. If the price jumps above $165, it would be a signal to trade Johnson & Johnson shares, and the next target could be around $170 resistance.

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