Abbott Laboratories vs. Johnson & Johnson: Which Healthcare Stock Is a Better Buy in 2026?
2026-07-31 19:29
•Brendan Coffey •The Motley Fool
•••••• ••• Axe Cap view
Abbott vs. Johnson & Johnson: Which Healthcare Stock Fits 2026?
Abbott’s growth story looks more compelling than J&J’s, despite some risks.
Abbott Laboratories trades cheaper relative to its sales and earnings compared to Johnson & Johnson, which is notable for investors scanning the healthcare space. Abbott’s expected 13% sales growth—boosted by acquisitions like Exact Sciences—and solid cash generation paint a picture of a company accelerating nicely. In contrast, Johnson & Johnson brings scale and profitability but suffers from legal baggage around talc settlements and biosimilar competition that could pressure margins and earnings growth to 7.5%. For South African investors, the story translates into risk-managed exposure to global healthcare growth via ADRs or USD/ZAR pairs, where a weaker rand could amplify returns. Abbott looks more attractive priced-for-growth, but litigation risks and product pacing could slow it down. Meanwhile, J&J’s premium valuation hinges on its pharma pipeline delivering as promised. If settlement costs balloon or biosimilars erode sales faster than anticipated, returns might compress. this is just our opinion and not financial advice
Buy Abbott Laboratories for higher growth and better valuation. Watch Johnson & Johnson, but avoid adding given legal uncertainties and slower growth. Monitor USD/ZAR, as currency swings will impact foreign returns.
- ABT
- JNJ
- USD/ZAR
- Abbott litigation and product growth slowdown
- Johnson & Johnson talc settlement costs and biosimilar competition
6/10
Abbott Laboratories and Johnson & Johnson are compared as healthcare investments for 2026. Abbott trades at lower valuations with expected 13% sales growth but faces litigation risks and slower growth in key products like FreeStyle Libre. Johnson & Johnson offers superior profitability and a robust pharmaceutical pipeline with 28 billion-dollar products, though it faces talc settlement costs and biosimilar competition. Abbott is recommended as the better buy due to stronger expected sales growth and lower valuation metrics.
Our take is based on reporting first published by The Motley Fool.