Johnson & Johnson (NYSE:JNJ) stock rose 0.10% (As on October 7, 11:35:42 AM UTC-4, Source: Google Finance) after Wells Fargo upgraded the company to Overweight from Equal Weight with a price target of $212, up from $170. The firm says its concerns around pharmaceutical tariffs, pricing risk and Stelara’s loss of exclusivity are now largely behind Johnson & Johnson. Wells Fargo analyst Larry Biegelsen pointed to J&J’s valuation as a key driver for the upgrade, noting that risks tied to drug pricing and pharmaceutical tariffs appear to be fading. He highlighted that the company’s pharmaceutical segment could deliver stronger growth beginning in 2026, with 2027 expected to outpace the prior year. That trajectory, he said, creates a more compelling entry point for long-term investors.
The move comes just days after Pfizer (PFE) announced a deal with the Trump administration to provide its drugs at a discount to U.S. consumers. Biegelsen expects similar agreements from other pharmaceutical players, which could reshape pricing dynamics across the industry. For Johnson & Johnson, the combination of easing regulatory pressures, a more attractive valuation, and improving pharmaceutical prospects provided enough for Wells Fargo to take a more bullish stance on the stock. Biegelsen also pointed to the recent discount arrangement between rival Pfizer (PFE) and President Donald Trump as an indication that U.S. government tariff pressure may soften. The move may also lead to a less aggressive drug pricing environment, which could be beneficial for Johnson & Johnson.
Furthermore, the Wells Fargo analyst pointed to shareholders’ confidence in the company’s ability to navigate headwinds posed by the expiration of the company’s exclusive production rights on its flagship anti-inflammatory injection, Stelara. He also pointed out that the New Jersey-based company has set aside approximately $55 billion to expand its domestic manufacturing, as well as research and development, over the next four years. This adds to its $2 billion commitment to expand drug production in North Carolina. The Trump administration has emphasized that pharma companies that invest in local production will enjoy tariff exemptions.
Additionally, Biegelsen expects Johnson & Johnson’s revenue to expand by $3 billion more in 2027 than the current forecast estimate. The analyst also estimates the company’s earnings per share could be 17.5 times higher by 2027. He, therefore, upgraded the stock to an Overweight rating, seeing these factors as an “attractive entry point” for the stock.