Research Market strategy
By Swissquote Analysts
Published on 20.10.2021
Morning news

Higher Sales Across Divisions Lift Johnson & Johnson as Healthcare Sector Recovers

Topic of the day

Johnson & Johnson's sales climbed in the latest quarter compared with the same stretch of last year, reflecting a return of more doctor's visits and medical procedures after the pandemic disrupted the industry. The New Brunswick, N.J., company's revenue rose 11% year over year in the third quarter to $23.34 billion. Its results are closely watched in the healthcare sector because its products span multiple categories. Medical-device sales grew 7.6% amid a higher level of surgical procedures. Pharmaceutical sales were up 14%, the result of more prescriptions of drugs for multiple myeloma, inflammatory diseases and other conditions. Johnson & Johnson's sales of consumer products such as Tylenol, Motrin and skin-care lines rose 5.7%. Those sales trends exclude acquisitions and divestitures. Earnings were $1.37 a share -- up from $1.33 a year ago -- or $2.60 a share after stripping out one-time items. Wall Street analysts had been forecasting sales of $23.64 billion and adjusted earnings of $2.35 a share, according to FactSet. One factor in the third-quarter sales shortfall was lower-than-expected sales of J&J's Covid-19 vaccine, which came in at $502 million, including $270 million in the U.S. J&J finance chief Joseph Wolk said in an interview that the company still expects full-year vaccine sales of about $2.5 billion. After the latest quarter's earnings growth, J&J raised its forecast for full-year profits. It now expects adjusted earnings of $9.77 a share to $9.82 a share in 2021, compared with its July outlook of $9.60 a share to $9.70 a share. Shares of Johnson & Johnson rose $3.75, or 2.3%, to $163.87.

Swiss stocks

The Swiss stock market ended Tuesday's trading slightly lower. The SMI lost 0.2 per cent to 11,943 points. Among the 20 SMI stocks, there were 16 price gainers and four price losers. A total of 25.76 (previously: 24.29) million shares were traded. The SMI was weighed down by heavyweight Nestle (-1.8%), among others. Investors dumped the share on the day before the publication of sales figures for the first nine months. In the pharmaceutical sector, Roche lost 1.6 per cent. A Covid 19 drug developed jointly with US company Atea failed to deliver the hoped-for result in a phase II trial. Roche will also present sales data on Wednesday. On the other hand, Holcim improved 1.9 percent. The Indian subsidiary ACC of the cement manufacturer had presented quite good third-quarter figures despite the current high input costs, according to analysts at Davy. Shares in Richemont (+0.2%) held up relatively well. After a decline in August, Swiss watch exports rose slightly again in September. Growth even surpassed that of September 2019, before the pandemic-related slump in 2020. Swatch slipped 0.8%. Credit Suisse (+1.1%) benefited from an upgrade to "buy" from "hold" by analysts at Kepler. However, Alcon (+3.6%) was at the top of the buy list. Swiss Re (+1.3%) benefited from convincing preliminary figures from competitor Munich Re. In addition, investors picked up cyclicals such as ABB (+1.1%) and Geberit (+0.8%). Off the SMI, Kühne + Nagel advanced by 2.3 per cent. The logistics group will publish its third quarter figures on Wednesday.

International markets


The European indices rose slightly on Tuesday, supported by the US markets, at the end of a session in which investors analysed numerous company results. The Stoxx Europe 600 index rose 0.3% to 468.6 points. In Paris, the CAC 40 lost less than 0.1%, while the SBF 120 finished almost stable. In Frankfurt, the DAX 40 gained 0.3%, while the FTSE 100 in London rose 0.2%. Mercialys gained 7.3% after confirming that it expects to report at least stable operating profit in 2021. Danone lost 3% after reporting quarterly sales and confirming targets for 2021. In Stockholm, Ericsson (-3.4%) reported third-quarter revenues 3% below analysts' consensus, according to Citi, with the bank explaining that the group suffered from supply chain difficulties. Third quarter adjusted Ebit came in 18% ahead, of which Citi estimates 6 percentage points was down to disciplined operational execution and product competitiveness offsetting the supply chain headwinds. Shares of TeamViewer fell 6.2% after Berenberg analysts downgraded their recommendation on the Germany-listed software maker to hold from buy.

United States

The S&P 500 notched its highest close in six weeks as investors parsed earnings reports to see how companies are managing inflation and supply-chain woes. The S&P 500 gained 33.17 points, or 0.7%, to 4519.63, off 0.4% from its record hit in early September. The Dow Jones Industrial Average added 198.70 points, or 0.6% to 35457.31, its highest close in two months. The tech-heavy Nasdaq Composite rose 107.28 points, or 0.7%, to 15129.09. Third-quarter earnings season is in its early days, with about 10% of S&P 500 companies having reported. Of those, roughly four out of five have beaten profit forecasts, according to FactSet. Travelers shares climbed $2.51, or 1.6%, to $155.39 after the insurance company beat estimates for revenue and core income per share. Procter & Gamble shares, meanwhile, fell $1.68, or 1.2%, to $140.66 after the consumer-product giant said it was raising prices on a host of household staples, as costs for freight and raw materials rose faster than anticipated. Bitcoin’s dollar value rose about 4.4% from its 5 p.m. ET level Monday, trading at $64,120.38 Tuesday. The first bitcoin-focused exchange-traded fund rose in its debut Tuesday. Fresh data showed that construction of new homes in the U.S. decreased in September after rising in August. Builders have been caught between strong demand from buyers—spurred in part by low interest rates—and shortages of materials, labor and lots.


Most major indexes in Asia closed higher in the middle of the week. In Hong Kong, the Hang Seng Index increased by 1.3 per cent. Technology stocks are particularly in demand. Alibaba rose by 8.1 per cent. Tencent climbed 2.4 per cent. On the Chinese mainland, however, the Shanghai Composite is almost unchanged. In Tokyo, the Nikkei index gains 0.3 per cent to 29,312 points. The Kospi in South Korea is down 0.2 per cent. North Korea confirmed the launch of a ballistic missile from a submarine on Monday.


U.S. Treasury yields climbed on Tuesday, pushing the 10-year Treasury note back to its highest level since around May, as the stock market rose. Federal Reserve Gov. Christopher Waller said that the central bank should begin tapering its monthly purchases of $120 billion in Treasurys and mortgage-related assets next month, affirming market expectations for a reduction in programs that were launched during the height of the pandemic but were viewed as no longer needed. The ten-year US Treasury yield gained nearly 5 basis points to 1.635% from 1.596% on Monday evening. The yield on the German Bund with the same maturity was -0.104%, compared with -0.45% on Monday evening.


Berenberg raises Easyjet to Buy (Hold) - Target 800 (720) p
RBC increases target Hugo Boss to EUR 68 (66) - Outperform
Berenberg lowers Teamviewer to Hold (Buy) - Target EUR 16.50 (40)

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