JNJ · Forward model · Bear case

The Bear case, 20 quarters out

Model as of 2026-08-27

Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.

Eight verticals: the four Innovative Medicine therapeutic areas and the four MedTech franchises that J&J publishes every quarter in the Exhibit 99.2 segment sales schedule. They sum to reported consolidated revenue within $2M in all fourteen quarters - $16,384M plus $8,926M is exactly the $25,310M reported for 2026 Q2 - so no quarter is padded and none is estimated. Only Other Innovative Medicine is apportioned, as the segment total less the three named areas, and it cross-checks to J&J's separately printed PH, ID and CVM subtotal within $2M every quarter. Disclosed and copied as reported: every franchise revenue line, both segments' income before tax, D&A and additions to PP&E, guidance, shares, cash and debt. Derived: segment EBITDA margins (Innovative Medicine 42.9% and MedTech 23.8% for 1H26), capex intensity, net debt of $28.3B and the seasonal factors. Assumed and labelled as such: every forward growth rate, the terminal margins of 44.0% and 26.0%, the twelve-quarter margin glide, the 8% discount rate, the 13.0x exit multiple, the $300M-a-quarter normalised corporate run-rate and the eight-quarter talc duration. Impossible to split honestly and therefore not attempted: franchise-level profit, capex and D&A - J&J publishes none of them, so each franchise carries its parent segment's margin unchanged. Corporate overhead of 1.2% of revenue is the 2026 Q2 unallocated expense of $679M less the disclosed $0.4B talc charge; the $258M of Orthopaedics separation cost in the same quarter sits inside that same unallocated line and is not added again. The model is GAAP-shaped, while J&J's guidance and the published consensus are both adjusted, so the guided sales range is the only guidance figure this model is checked against. Two limitations to read alongside the output: MedTech Orthopaedics stays consolidated for all twenty quarters even though the separation is targeted for 2027, and the share count is held flat at 2,409,898,597 because the only disclosed repurchases fund compensation plans and the diluted count rose year over year.

Where each case comes from

From cash flow to fair value

Capex outside the verticals

Each vertical's capex is a share of its own revenue, which is the right shape for capacity that scales with sales. These are not that: fixed-size programmes with their own schedule that spend whether or not any segment grows. They are added on top, and they are why free cash flow dips in the years below.

The projected path

The published model's 20 quarters. The horizon and sliders above do not change this table.

Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.

Model revisions

Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.