JNJ vs. Pfizer: Which Pharma Giant is the Better Investment Now?

Johnson & Johnson JNJ and Pfizer PFE rank among the world’s largest pharmaceutical companies, each with broad and diversified healthcare portfolios. J&J operates primarily through its pharmaceuticals and medical devices segments. Its pharmaceutical division boasts one of the industry’s most varied revenue streams, spanning areas like neuroscience, cardiovascular and metabolic diseases, immunology, oncology, pulmonary hypertension, and infectious diseases. Pfizer, meanwhile, holds a strong leadership position in oncology and also maintains a solid presence in inflammation and immunology, rare diseases and vaccines.Both companies have promising R&D pipelines capable of delivering innovative treatments and supporting future growth. But which stock presents a better investment opportunity right now? Let’s dive into their fundamentals, growth outlook and potential challenges to make a well-informed comparison.The Case for J&JJ&J’s biggest strength is its diversified business model, which helps it to withstand economic cycles more effectively. It operates through more than 275 subsidiaries.J&J’s Innovative Medicine unit is showing a growth trend. The segment’s sales rose 4.4% in the first quarter of 2025 on an organic basis despite the loss of exclusivity (LOE) for its multi-billion-dollar product, Stelara, and the negative impact of the Part D redesign. In 2025, J&J expects growth in the Innovative Medicine segment in the face of Stelara biosimilar entrants 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 its Innovative Medicine business to grow 5-7% from 2025 to 2030.J&J is also making rapid progress with its pipeline and has been on an acquisition spree lately, which has strengthened its pipeline. On the flip side, sales in J&J’s MedTech business are facing continued headwinds in the Asia Pacific, specifically in China. Sales in China are being hurt by the impact of the volume-based procurement (VBP) program and the anti-corruption campaign. J&J does not expect any improvement in its business in the Asia Pacific region, specifically in China, in 2025. Competitive pressure is also hurting sales growth in some MedTech businesses.The company lost U.S. patent exclusivity of its blockbuster drug, Stelara, in 2025. The launch of generics is expected to significantly erode the drug’s sales, hurting J&J’s sales and profits in 2025.J&J faces more than 62,000 lawsuits for its talc-based products, primarily baby powders. The lawsuits allege that its talc products contain asbestos, which caused many women to develop ovarian cancer. J&J insists that its talc-based products are safe and do not cause cancer. The company permanently discontinued the sales of its talc-based Johnson’s Baby Powder.In April, a bankruptcy court in Texas rejected J&J’s proposed bankruptcy plan to settle its talc lawsuits after a two-week trial in Houston. J&J will go back to the traditional tort system to fight the lawsuits individually with its bankruptcy strategy to settle the lawsuits failing for the third time.The Case for PFEPfizer is one of the largest and most successful drugmakers in oncology. The 2023 acquisition of Seagen strengthened its position in oncology further.After witnessing possibly its worst slowdown in 2023/early 2024, the company seems to be gradually making a comeback and entering a transition phase. With its COVID-related uncertainties diminishing, its revenue volatility is declining.Though COVID revenues are declining, Pfizer’s non-COVID operational revenues are improving, driven by its key in-line products like Vyndaqel, Padcev and Eliquis, new launches and newly acquired products like Nurtec and those from Seagen.Pfizer’s significant cost reduction and efforts to improve R&D productivity measures should drive profit growth.However, Pfizer faces its share of challenges, the key being declining sales of its COVID-19 products. Pfizer also expects a significant impact from the loss of patent exclusivity in the 2026-2030 period, as several of its key products, including Eliquis, Vyndaqel, Ibrance, Xeljanz and Xtandi, will face patent expirations. The Medicare Part D redesign is also expected to hurt sales of Pfizer’s higher-priced drugs like Vyndaqel, Ibrance and Xeljanz in 2025.Though Pfizer does not expect strong top-line growth over the next three years due to the LOEs, it expects EPS growth.How Do Estimates Compare for JNJ & PFE?The Zacks Consensus Estimate for J&J’s 2025 sales and EPS implies a year-over-year increase of 2.8% and 6.4%, respectively. The Zacks Consensus Estimate for 2025 earnings has risen from $10.60 per share to $10.62 per share for 2025 and from $10.98 per share to $11.00 per share over the past 30 days.JNJ Estimate MovementImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Pfizer’s 2025 sales and EPS implies a year-over-year decline of 0.6% and 1.6%, respectively. The Zacks Consensus Estimate for earnings has remained unchanged at $3.06 per share for 2025 and at $3.09 per share for 2026 over the past 30 days.PFE Estimate MovementImage Source: Zacks Investment ResearchPrice Performance and Valuation of J&J & PFEYear to date, J&J’s stock has risen 9.5%, while Pfizer’s stock has failed to deliver any returns compared with the industry’s increase of 0.2%Image Source: Zacks Investment ResearchPfizer looks more attractive than J&J from a valuation standpoint. Going by the price/earnings ratio, J&J’s shares currently trade at 14.41 forward earnings, slightly lower than 14.93 for the industry. Pfizer’s shares currently trade at 8.33 forward earnings, significantly lower than the industry and the stock’s 5-year mean of 10.87.Image Source: Zacks Investment ResearchJohnson & Johnson's dividend yield is 3.3%, while Pfizer's is 6.7%. Johnson & Johnson's return on equity of 33.5% is higher than Pfizer’s 20.3%.Image Source: Zacks Investment ResearchPFE or JNJ: Which is a Better Pick?Though Pfizer is on a recovery path, the upcoming patent cliff raises uncertainty. We would like to wait and see how the company navigates through the challenge. Pfizer has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Meanwhile, J&J, with its Zacks Rank #2 (Buy), improving growth prospects, rising estimates, and recent price appreciation, may prove to be a better pick than Pfizer. J&J has shown steady revenue and EPS growth for years. Though the softness in the MedTech unit and the legal battle surrounding its talc lawsuits are a concern, its Innovative Medicines unit is showing a growing trend. 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. While newly launched products should drive growth in the Innovative Medicines segment in the second half, the MedTech segment may benefit from new products and easier comps. J&J expects growth to accelerate from 2026 onward.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks