On Tuesday, Johnson & Johnson (NYSE:JNJ) reported a third-quarter 2025 adjusted earnings of $2.80 per share, up 15.7% year over year, beating the consensus of $2.75.

• JNJ is trading at elevated levels. See what the experts say here.

Johnson & Johnson also announced plans to separate its Orthopedics business to enhance strategic and operational focus.

The transaction would establish a standalone orthopedics business, operating as DePuy Synthes. Johnson & Johnson aims to complete the project within 18 to 24 months.

Also Read: FDA Adds New Warning For Johnson & Johnson's Cancer Cell Therapy

Analyst Take

Bank of America (BofA) Securities stated that the biggest driver of the revenue beat was Stelara, which eroded less than modeled. Fiscal 2025 revenue guidance was raised very slightly.

Analyst Tim Anderson on Wednesday wrote, "The exit makes sense, in our view; in the long-term, DePuy Synthes should benefit from improved focus and become more competitive."

BofA rates Johnson & Johnson as Neutral, and the model shows about-average growth, with the stock at an above-average valuation, even on a sum-of-the-parts to reflect the higher multiple on MedTech, implying Johnson & Johnson is fairly valued.

Johnson & Johnson downplayed the likelihood of large acquisitions, emphasizing smaller deals as more probable. The company reiterated it doesn't need major M&A to achieve the high end of long-term growth targets. Smaller transactions are seen as value-creating opportunities.

Price Action: JNJ stock is down 0.70% at $189.51 at the last check on Wednesday.

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