J&J & Pfizer Face Patent Risks: Which Stock Looks Better Positioned?

Johnson & Johnson JNJ and Pfizer PFE are healthcare giants with a strong oncology presence. Beyond cancer, J&J markets medicines for immunology, neuroscience, cardiovascular and metabolic diseases, pulmonary hypertension and infectious diseases, while also maintaining a leading medical devices business. Pfizer, meanwhile, has a solid presence in inflammation and immunology, rare diseases and vaccines.Both companies are either already facing or about to face a loss of exclusivity (LOE) cliff. So, which stock looks like the better investment today? A closer look at their fundamentals, growth prospects and key challenges may help investors decide.The Case for J&J StockJ&J’s biggest strength is its diversified business model, as it operates through pharmaceuticals and medical devices divisions. It has more than 275 subsidiaries and boasts 28 platforms or products with more than $1 billion in annual sales, with the aim of adding even more. Its diversification helps it withstand economic cycles more effectively. It also boasts strong cash flows and has increased its dividends for 64 consecutive years. J&J believes that the depth of its portfolio and pipeline is stronger than ever.J&J’s Innovative Medicine unit is showing a growth trend. The segment’s sales rose 5.6% on an organic basis in the first quarter of 2026 despite the LOE of the blockbuster drug, Stelara, in 2025. Growth was driven by J&J’s key drugs like Darzalex, Erleada and Tremfya. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato also contributed significantly to growth.J&J’s MedTech business has improved in the past four quarters, driven by the acquired cardiovascular businesses, Abiomed and Shockwave, as well as Surgical Vision and wound closure in Surgery. Improvements in J&J’s electrophysiology business also drove growth. MedTech sales rose 4.7% on an organic basis in the first quarter.J&J also rapidly advanced its pipeline in the past year, attaining significant clinical and regulatory milestones that will help drive growth through the back half of the decade. Key new drugs approved recently are Inlexzoh/TAR-200, a first-of-its-kind drug-releasing system, for treating high-risk non-muscle invasive bladder cancer, Imaavy (nipocalimab) for generalized myasthenia gravis and J&J and partner Protagonist Therapeutics’ PTGX oral targeted peptide inhibitor of the IL-23 receptor, Icotyde (icotrokinra) for treating moderate-to-severe plaque psoriasis (PsO).In 2025, J&J invested more than $32 billion in R&D and M&A, including the acquisitions of Intra-Cellular Therapies and Halda Therapeutics. Backed by regular pipeline success, J&J expects a more pronounced impact from new products in 2026 than in 2025.J&J believes 10 of its new products/pipeline candidates in the Innovative Medicine segment have the potential to deliver peak sales of $5 billion, including Talvey, Tecvayli, Imaavy, Caplyta, Inlexzo, Rybrevant, Lazcluze and Icotyde.However, J&J faces its share of headwinds like the legal battle surrounding its talc lawsuits, the Stelara patent cliff, the upcoming LOE of key drugs Opsumit and Simponi, and softness in MedTech China.The Case for PFE StockPfizer is one of the largest and most successful drugmakers in oncology. Its position in oncology was strengthened with the acquisition of Seagen in 2023.Oncology sales comprise around 27% of its total revenues. Its oncology revenues grew 7% to $3.8 billion in the first quarter of 2026, driven by drugs like Lorbrena, the Braftovi-Mektovi combination and Padcev.Pfizer’s dependence on its COVID business has now reduced. Its non-COVID operational revenues are improving, driven by key in-line products like Vyndaqel, Padcev and Eliquis, new launches and newly acquired products like Nurtec and those from Seagen. Revenues from Pfizer’s non-COVID products rose 7% operationally in the first quarter. Pfizer's recently launched and acquired products delivered revenues of $3.1 billion in the first quarter, rising 22% on a year-over-year basis. In 2026, Pfizer expects its recently launched and acquired products to record continued double-digit growth.Pfizer is also trying to rebuild its pipeline through acquisitions. Seagen, Metsera and Biohaven are the most significant strategic acquisitions in recent years.The company is rebuilding its pipeline in oncology and obesity, which it believes can drive growth in 2028 and beyond. Pfizer is on track to start 20 pivotal studies in 2026, including 10 pivotal studies for the ultra-long-acting obesity candidates added from last year’s Metsera acquisition and four for PF-08634404, a dual PD-1/VEGF inhibitor in-licensed from Chinese biotech 3SBio in 2025.Pfizer’s significant cost reduction and efforts to improve R&D productivity measures are also driving profit growth. Pfizer’s dividend yield stands at around 6.6%, which is also impressive.However, Pfizer expects a significant negative impact on revenues from LOE impact in the 2026-2030 period as several of its key products, including Eliquis, Ibrance, Xeljanz and Xtandi, face patent expirations. The LOE cliff is expected to hurt sales by approximately $1.5 billion in 2026.Pfizer’s 2026 outlook also failed to impress investors. Pfizer’s revenue and earnings guidance for 2026 represents mostly flat to slightly negative growth.Nonetheless, although Pfizer’s 2026 sales guidance indicates minimal growth, the company expects a high single-digit revenue CAGR for five years starting in 2029. Pfizer expects the growth to be driven by its advancing R&D pipeline and the continued progress of new and acquired products.How Do Estimates Compare for JNJ & PFE?The Zacks Consensus Estimate for J&J’s 2026 sales and EPS implies a year-over-year increase of 7.0% and 7.2%, respectively. The Zacks Consensus Estimate for 2026 earnings has risen from $11.54 to $11.57 over the past 60 days, while that for 2027 earnings has gone up from $12.44 per share to $12.58 over the same time frame.JNJ Estimate MovementImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Pfizer’s 2026 sales and EPS implies a year-over-year decrease of 1.5% and 7.2%, respectively. The Zacks Consensus Estimate for 2026 earnings has risen from $2.97 per share to $2.99 per share, while that for 2027 has risen from $2.82 per share to $2.86 per share over the past 60 days.PFE Estimate MovementImage Source: Zacks Investment ResearchPrice Performance and Valuation of J&J & PFEYear to date, J&J stock has risen 12.0%, while Pfizer stock is up 4.2% against the industry’s decline of 0.7%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 19.37 forward earnings, higher than 16.96 for the industry and the stock’s 5-year mean of 15.65. Pfizer’s shares currently trade at 8.83 forward earnings, lower than 16.96 for the industry and the stock’s 5-year mean of 9.73.Image Source: Zacks Investment ResearchJohnson & Johnson's dividend yield is 2.2%, while Pfizer's is 6.6%.Image Source: Zacks Investment ResearchPFE or JNJ: Which Stock is a Better Pick?J&J and Pfizer have a Zacks Rank #3 (Hold) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. This makes choosing one stock a difficult task.J&J expects 2026 to be a year of accelerated growth. The company expects both its Innovative Medicines and MedTech segments to deliver stronger growth this year. The company is confident that it can achieve its target of generating around $100 billion in revenues in 2026. It expects sales to continue to improve in 2027, with a “line of sight” to double-digit growth by the end of the decade. J&J believes that it is already achieving this growth. Though J&J’s total revenues are currently rising in a mid-single-digit range, excluding Stelara, J&J’s top line grew in a double-digit range in the first quarter.Despite headwinds like the legal battle surrounding its talc lawsuits, the Stelara patent cliff, the upcoming LOE of key drugs Opsumit and Simponi and softness in MedTech China, J&J looks quite confident that it will be able to navigate these challenges.Pfizer stock has taken a beating in the past three years as its revenues have declined substantially due to lower sales of its COVID products. Though Pfizer is on a recovery path, the upcoming patent cliff raises uncertainty about how the company navigates through the challenge. J&J seems to have handled the Stelara LOE quite well, which tilts us in favor of J&J.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks