Bidness Etc - How Is Johnson & Johnson (JNJ) Performing In The Market And How It Can Improve

Despite being one of the biggest pharma stocks, Johnson & Johnson has to play smartly to do business well.

Johnson & Johnson is doing quite well in the market. It is believed that the investors and the Wall Street love the pharmaceutical sector. The pharmaceutical giants that include Johnson & Johnson have extensive product portfolios which allow them to produce millions and billions in operating cash flow each year. Apart from being a giant in one of the biggest sector, the pharmaceutical sector also has its disadvantage. One of the biggest disadvantages is that the product portfolio of companies like Johnson & Johnson and Novartis etc. are well established most of the times, but they struggle to do business in the market.

The pharmaceutical stocks underperform when the industry, overall, is on a major bull run. “Big Pharma portfolios are susceptible to patent loss expirations, which can expose their most important drugs to generic competition,” as reliable sources reports. However, apart from anything, Johnson & Johnson is one company that I balanced when it comes to stability as well as growth potential. From one perspective, the company is not a traditional pharma company rather than being one giant healthcare company for that matter which specializes in providing healthcare products, medical devices, and pharmaceutical segment.

The pharmaceutical segment of the company is the part where it derives its double-digit gross margins from the bulk. Moreover, the consumer healthcare segment does good business in the market as well by delivering an expected operating cash flow. However, stocks like Johnson & Johnson have to do business smartly in order to stay in the competition. There are things which the company should consider in order to increase its share price growth for the future. The company has to make acquisitions and purchases of other companies in the same sector to sustain its growth.

There is no doubt about the fact that Johnson & Johnson has brought in a number of new therapies, organic or inorganic, in the market in recent times. However, the part where it lacks is making acquisitions and purchases. These acquisitions and purchases will help the company to keep it ahead of the patent loss curve. Hence, it would have to consider either acquiring or purchasing smaller pharmaceutical or biopharmaceutical companies that have diversified product portfolios or blockbuster drugs.

Recently, the company announced that it wishes to expand in Asia. The company’s plans are to continue expansion in the Asian region where it seeks to increase its profits and revenues as well as earnings potential for the years to come.