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Part of Financial results and stock performance comparisons among AbbVie, Johnson & Johnson, Eli Lilly, and Merck.

How could the MedTech segment miss affect Berkshire Hathaway's holdings?

Likely What happens if… A possibility worth considering, not a forecast.

Berkshire Hathaway's JNJ holdings face valuation pressure after MedTech segment miss The MedTech segment's sales growth slowed to 2.5%, reaching $8.6 billion, which missed the estimated $8.71 billion in the third quarter. This weak performance, combined with deal dilution costs, contributed to a selloff, causing Johnson & Johnson's stock to fall 6.62% over the past month. As Berkshire Hathaway historically held a stake in Johnson & Johnson, this decline in JNJ's stock price directly reduces the market value of that investment holding.

Reported by 1 independent outlet Written Yesterday
Effect
Mild negative
How direct
Brind's reasoning
When
Within weeks
The story
Still developing

How it reaches Berkshire Hathaway

Reported by news outletsBrind's reasoning

Tap any step to see the evidence behind it.

The facts so far

As reported. Each one links to where it comes from.

  • JNJ MedTech segment sales grew 2.5% to $8.6 billion, missing estimates of $8.71 billion.aol.com
  • J&J's stock fell 6.62% over the past month following the third-quarter report.aol.com
  • Adjusted EPS fell 7.5% year over year due to payments for the Firefly Bio and SAIL Biomedicines deals.aol.com

Why it matters

For Berkshire Hathaway, the valuation of its holdings in Johnson & Johnson is a component of its overall investment portfolio. Any significant, sustained decline in JNJ's stock price, driven by operational weaknesses like the MedTech miss, directly translates into a reduction in the value of that specific asset.

While JNJ overall beat Q3 estimates and raised its full-year sales forecast to about $101.2 billion, the MedTech weakness and the costs associated with recent deals introduce specific risks. These risks force investors to compare JNJ's valuation against peers like Eli Lilly and Pfizer, potentially pressuring the stock's premium and affecting the perceived value of the holding.

What we don't know yet

  • Will JNJ be able to offset the MedTech segment's weakness with growth in its pharmaceutical brands?
  • How will the ongoing talc settlement charges impact JNJ's future earnings and valuation?

What would change this answer

JNJ reports strong growth in its pharmaceutical brands like Tremfya and IcotydeThis could offset the MedTech drag, strengthening the bull case and stabilizing the stock price for Berkshire Hathaway.
MedTech misses again in the fourth quarterThis would weaken the investment thesis further, increasing the pressure on JNJ's stock price and negatively impacting the valuation of Berkshire Hathaway's stake.

Reporting

Keep going

The full eventJohnson & Johnson Q3 Sales Rise, But Stock Drops on MedTech Miss Everything aboutBerkshire Hathaway

Brind's analysis is written by AI from the reporting linked above and can be wrong. This explainer is a possibility worth considering, not a forecast: steps marked as Brind's reasoning are not stated in the reporting. It is not investment advice; do your own research.