Shares in healthcare group Johnson & Johnson (JNJ) were in worse shape today despite pledging to ramp up investment in U.S. manufacturing in the face of Trump tariffs.
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The group said it would be investing $2 billion in North Carolina as it aims to expand its U.S. manufacturing presence amid the threat of pharmaceutical import duties from the Trump administration.
Duties Threat
Earlier this month, Trump said he plans to impose phased-in tariffs for the pharmaceutical sector, which could start small and eventually rise to 250%.
J&J said today that it plans to build a 160,000-plus sq. ft. plant at contract development and manufacturing organization (CDMO) Fujifilm Biotechnologies’ new site in Holly Springs, NC, as part of a drive to manufacture “the vast majority of advanced medicines in the US to meet the needs of patients in the US.”
J&J said it would also announce plans for additional manufacturing facilities in the U.S. and the expansion of current U.S. sites in the coming months.
This follows its announcement back in March that it would hike U.S. investments by 25% to over $55 billion in the next four years. This will likely further boost its U.S. sales.
The Fujifilm site is dedicated to large-scale cell culture manufacturing of bulk drug substance production for biopharmaceuticals and has been set up with an investment of more than $3.2 billion.
U.S. Incentives
In a statement, J&J said its $2 billion commitment, due to be delivered over 10 years, will “expand the company’s US manufacturing capacity and create approximately 120 new jobs in North Carolina.”
“Johnson & Johnson has more manufacturing facilities in the US than in any other country, and we continue to strengthen our presence here,” said Joaquin Duato, the group’s chairman and chief executive. “With the recent signing of the One Big Bill Beautiful Act, we continue to expand our investment in the US to lead the next era of healthcare innovation.”
The Act introduced measures that extend existing tax breaks such as R&D credits and incentives for reshoring and onshoring manufacturing to the US.
Other pharma firms to increase their U.S. manufacturing operations this year include AstraZeneca (AZN) and Eli Lilly (LLY).
Is JNJ a Good Stock to Buy Now?
On TipRanks, JNJ has a Moderate Buy consensus based on 8 Buy and 10 hold ratings. Its highest price target is $190. JNJ stock’s consensus price target is $175.88, implying a 1.66% downside.
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