Morgan Stanley has upgraded Johnson & Johnson (NYSE:JNJ) from Equalweight to Overweight and raised its price target to $262.00 from $200.00, reflecting a marked shift in the firm's view of the company’s growth trajectory.
The upgrade follows a year in which Johnson & Johnson outpaced broader market measures, with the stock rising 43% compared with a 16% increase for the S&P 500 and a 21% gain for the NYSE Arca Pharmaceutical Index, according to Morgan Stanley's analysis.
In explaining the change, Morgan Stanley pointed to heightened confidence in JNJ’s forward growth outlook and to the easing of a previously persistent source of uncertainty - Biopharma most-favored-nation (MFN) agreements that had acted as an overhang across the industry. The firm said that resolution of that uncertainty has improved visibility into future performance.
Morgan Stanley set out explicit medium-term assumptions, projecting compound annual growth rates for 2026-2030 of about 5.5% for revenue and roughly 12% for earnings per share. The firm noted that these rates place Johnson & Johnson in the "higher growth" cohort when compared with its Biopharma peers.
As part of the upgrade, Morgan Stanley increased its revenue estimates for a set of JNJ products. The firm named Tremfya, Icotyde, Tecvayli and Darzalex as contributors to the revision, and said the adjustments lift annual revenue projections by approximately $3 billion to $7 billion on top of Johnson & Johnson’s existing $100 billion-plus revenue base.
Investor attention to Johnson & Johnson has coincided with several analyst updates in the wake of the company’s latest quarterly results. The company reported fourth-quarter revenue of $24.6 billion, a figure that exceeded consensus expectations and demonstrated momentum in its main businesses.
Following that report, TD Cowen raised its price target to $250 and kept a Buy rating. Stifel increased its target to $220 while maintaining a Hold rating. RBC Capital reiterated an Outperform rating with a $240 price target and noted that Johnson & Johnson’s earnings per share were in line with forecasts. Guggenheim continued to carry a Buy rating with a $227 target, citing sales that slightly beat both Guggenheim’s own estimates and consensus. Freedom Capital moved its price target to $220, noting the company’s ongoing strong performance and revenue beats.
These analyst actions together reflect an industry-wide reassessment of Johnson & Johnson’s near- to medium-term prospects, driven by stronger-than-expected quarterly results and revised product-level revenue assumptions from Morgan Stanley.
Summary
Morgan Stanley upgraded JNJ to Overweight and raised its price target to $262, pointing to better growth visibility after resolution of Biopharma MFN uncertainties and upward revisions to product revenue forecasts. Multiple other firms adjusted targets after JNJ reported fourth-quarter revenue that surpassed consensus.