J&J vs. AbbVie: Which Healthcare Powerhouse Is Better Positioned?

Johnson & Johnson JNJ and AbbVie ABBV are both pharma-driven healthcare giants with a strong presence in immunology, oncology and neuroscience areas. Other than that, J&J also has drugs for cardiovascular and metabolic diseases, pulmonary hypertension and infectious diseases, along with a strong presence in the medical devices segment. On the other hand, AbbVie entered the aesthetics market by acquiring Botox maker Allergan in 2020.While J&J boasts blockbuster drugs like Stelara and Darzalex, AbbVie is best known for Humira and newer growth drugs like Skyrizi and Rinvoq. However, both are now facing a “patent cliff” challenge — ABBV with Humira and JNJ with Stelara — which means both must rely on pipelines and acquisitions to sustain growth.But which offers the better investment opportunity? A closer examination of their fundamentals, growth outlook and risks is needed to decide.The Case for J&JJ&J’s biggest strength is its diversified business model, which helps it to withstand economic cycles more effectively. It has more than 275 subsidiaries, indicating that the business is extremely well-diversified. This diversification helps withstand economic cycles more effectively.J&J’s Innovative Medicine unit is showing a growth trend. The segment’s sales rose 2.4% in the first half of 2025 on an organic basis despite the loss of exclusivity (LOE) of Stelara and the negative impact of the Part D redesign. J&J expects continued growth in the second half of 2025 to be driven by its key products such as Darzalex, Tremfya, Spravato and Erleada, as well as new drugs like Carvykti, Tecvayli and Talvey and new indications for Tremfya and Rybrevant.J&J expects to generate more than $57 billion in sales in the Innovative Medicines segment in 2025. It expects the Innovative Medicine business to grow 5% to 7% from 2025 to 2030.J&J’s MedTech segment sales rose 6.1% on an operational basis in the second quarter, improving from the first-quarter levels, driven by Cardiovascular, Surgery and Vision, which is likely to drive growth in the second half.J&J is also rapidly advancing its pipeline, attaining significant clinical and regulatory milestones that will help accelerate growth through the back half of the decade. J&J has also been on an acquisition spree, with the latest acquisition of Intra-Cellular Therapies strengthening its presence in the neurological and psychiatric drug market.J&J boasts a solid dividend history, having increased its dividend for 63 consecutive years.On the flip side, sales in J&J’s MedTech business are facing continued headwinds in China. Sales in China are being hurt by the impact of the volume-based procurement (VBP) program. VBP is a government-driven cost containment effort in China. J&J expects continued impacts from VBP issues in China in 2025 as the program continues to expand across provinces and products. Competitive pressure is also hurting sales growth in some MedTech businesses.J&J lost U.S. patent exclusivity of Stelara in 2025.  Several biosimilar versions of Stelara were launched in the United States in 2025, following the LOE for the drug. The launch of generics is significantly eroding the drug’s sales and hurting J&J’s sales and profits. Stelara sales declined 38.6% in the first half of 2025. The uncertainty around the talc lawsuits and pharma tariffs also lingers.The Case for AbbVieAbbVie has successfully navigated the LOE of its blockbuster drug, Humira, which once generated more than 50% of its total revenues. It has accomplished this by launching two other successful new immunology medicines, Skyrizi and Rinvoq, which are performing extremely well, bolstered by approvals in new indications, and should support top-line growth in the next few years.Skyrizi and Rinvoq generated combined sales of $11.6 billion in the first half of 2025. Skyrizi sales are now annualizing at almost $18 billion and Rinvoq at over $8 billion. AbbVie expects combined sales of Skyrizi and Rinvoq to be more than $25 billion in 2025 and more than $31 billion by 2027.AbbVie’s oncology and neuroscience drugs are also contributing to top-line growth. AbbVie’s oncology segment generated combined revenues of $3.3 billion in the first half of 2025, up 4.2% year over year, as higher sales of Venclexta and contributions from new drugs, Elahere and Epkinly, more than offset declining Imbruvica sales due to competitive pressure. Sales of its neuroscience drugs increased 20.3% to almost $5 billion in the first half of 2025, driven by higher sales of Botox Therapeutic, depression drug Vraylar and newer migraine drugs Ubrelvy and Qulipta.AbbVie has been on an acquisition spree in the past couple of years to bolster the early-stage pipeline that should drive long-term growth. Particularly, it is signing several M&A deals in the immunology space, its core area, while also signing some early-stage deals in oncology and neuroscience areas. AbbVie has executed more than 30 M&A transactions since the beginning of 2024.However, the company faces some near-term headwinds like Humira’s biosimilar erosion, increasing competitive pressure on cancer drug Imbruvica and a slow market growth trend for Juvederm fillers in the United States and China due to challenging market conditions and weakened consumer sentiment.How Do Estimates Compare for JNJ & ABBV?The Zacks Consensus Estimate for J&J’s 2025 sales and EPS implies a year-over-year increase of 5.2% and 8.8%, respectively. The EPS estimate for 2025 has risen from $10.62 per share to $10.86 per share over the past 60 days, while that for 2026 has risen from $11.00 per share to $11.36 per share over the same timeframe.JNJ Estimate MovementImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for AbbVie’s 2025 sales and EPS implies a year-over-year increase of 7.5% and 18.9%, respectively. The EPS estimate for 2025 has declined from $12.25 per share to $12.03 per share over the past 60 days, while that for 2026 has risen from $14.06 per share to $14.34 per share over the same timeframe.ABBV Estimate MovementImage Source: Zacks Investment ResearchPrice Performance and Valuation of J&J & ABBVDespite tariff fears and market volatility, stocks of both JNJ and ABBV have risen this year. Year to date, J&J’s stock has risen 26.3%, while AbbVie’s stock has risen 23.0% compared with the industry’s increase of 1.3%Image Source: Zacks Investment ResearchAbbVie looks a tad more attractive than JNJ from a valuation standpoint. Going by the price/earnings ratio, AbbVie’s shares currently trade at 15.61 forward earnings, higher than 14.74 for the industry, and its 5-year mean of 12.84. J&J’s shares currently trade at 15.93 forward earnings, also higher than the industry as well as the stock’s 5-year mean of 15.65.Image Source: Zacks Investment ResearchABBV offers a slightly higher yield. J&J’s dividend yield is 2.9%, while AbbVie’s is around 3.2%.Image Source: Zacks Investment ResearchJNJ or ABBV: Which is a Better Pick?AbbVie and J&J have a Zacks Rank #3 (Hold) each, which makes choosing one stock a difficult task. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Both have seen their stocks and estimates rise this year, but are steeply valued compared to other large drugmakers like Pfizer PFE, Merck MRK, Biogen and Amgen, among others.J&J has shown steady revenue and EPS growth for years. J&J considers 2025 to be a “catalyst year,” positioning the company for growth in the second half of the decade. J&J expects operational sales growth in both the Innovative Medicine and MedTech segments to be higher in the second half than in the first. However, it is in the midst of a major patent cliff with LOE of one of its biggest drugs, Stelara, in 2025.On the other hand, AbbVie has faced its biggest challenge — Humira’s patent cliff — quite well and looks well-positioned for continued strong growth in the years ahead. AbbVie is returning to robust revenue growth in 2025, which is just the second year following the U.S. Humira LOE, driven by its ex-Humira platform. Sales of AbbVie’s ex-Humira drugs rose more than 22% (on a reported basis) in the quarter, driven by Skyrizi, Rinvoq and neuroscience drugs.Boosted by its new product launches, AbbVie expects to return to mid-single-digit revenue growth in 2025 with a high single-digit CAGR through 2029, as the company has no significant LOE events for the rest of this decade. With no significant LOEs in this decade, AbbVie enjoys the flexibility to invest more in R&D to continue to acquire external innovation.We think AbbVie’s strong ex-Humira growth makes it the better pick for the short term until J&J navigates the Stelara patent cliff.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Johnson & Johnson (JNJ): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report Merck & Co., Inc. (MRK): Free Stock Analysis Report AbbVie Inc. (ABBV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks