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Stock Watch: Johnson & Johnson’s Q2 Helps Pharma Sentiment

After The Post-Pandemic Sell-Off, Investors Could Be Returning To The Sector

 
• By Andy Smith

Pharmaceutical stocks have underperformed in the year to date, but J&J, Novartis and GSK may have started to turn the worm.

Stock Watch Image, Andy Smith
ANDY SMITH OFFERS A LIFE SCIENCE INVESTOR'S PERSPECTIVE ON BIOPHARMA BUSINESS

In the year to the start of second-quarter earnings season, the broad US S&P 500 stock index had risen by nearly 19%. This was partly driven by big technology companies and partly by multiple expansion resulting from investors’ hopes that falling inflation will increase company profits. A notable absentee from this party was the pharmaceutical sector, with the NYSE Arca Pharmaceutical Index (DRG) falling by nearly 2%, while healthcare conglomerate Johnson & Johnson’s (J&J’s) stock price lagged both these indexes with a fall by nearly 10% over the same period.

However, J&J’s second-quarter earnings announcement prompted a greater than 6% stock price rise against the DRG’s rise of just over...

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