JNJ: Mgmt. Still Sees Accelerating 2H Growth - Overall Raised Guidance Seems Realistic

Research evidence excerpt

JNJ: Mgmt. Still Sees Accelerating 2H Growth - Overall Raised Guidance Seems Realistic

ed on Q2 MedTech growth. Q2 adj. oper. sales grew 3.7% in Prior NC 2.85 E 2.96 E 3.03 E 11.55 E

MedTech, below our 4.9% est. and +4.7% in Q1. While growth improved from Q1 to Q2 2027E 2.77 E 2.98 E 3.01 E 3.22 E 12.65 E

in Ortho, Surgery and Vision, Cardio underperformed due to PFA competitive pressure/ Prior 2.94 E 3.09 E 3.14 E 3.37 E 12.55 E

China inventory headwind in EP and lower procedure volume in Abiomed. China inventory

dynamics hurt growth by ~400bps in EP and ~250bps in Cardio. Abiomed saw more Source:NA = NotCompanyAvailable,Data,NC =WellsNo Change,Fargo SecuritiesNE = Noestimates,Estimate and Factset.

patient selectivity following the CHIP-BCIS3 data (SOC outperformed Impella).

Larry Biegelsen

JNJ sees no material change in procedure volume. For Q2, mgmt. noted solid underlying Equity Analyst | Wells Fargo Securities, LLC Lawrence.Biegelsen@wellsfargo.com | 212-214-8015

demand in Medtech w/ stable procedure volume and no broad slowdown. Looking ahead,

Lei Huangthe company expects procedure volume to be generally in-line w/ mkt fundamentals. JNJ

Associate Equity Analyst | Wells Fargo Securities, LLC

is monitoring pressure on elective procedure volume as reported by hospitals, its business Lei.Huang@wellsfargo.com | 212-214-8039

is less dependent on these cases. Mgmt. does not expect meaningful impact from ACA Nathan Treybecksubsidy expiration. Equity Analyst | Wells Fargo Securities, LLC

Nathan.Treybeck@wellsfargo.com | 212-214-8042

MedTech growth still expected to accelerate in 2H. JNJ still expects improving Medtech Simran Kaur

growth in 2H vs. 1H without the extra wk. This implies 2H Medtech growth of at least Equity Analyst | Wells Fargo Securities, LLC