Jim Cramer expressed cautious optimism about Johnson & Johnson, acknowledging its strong underlying position but warning that the stock's recent surge is unsustainable. The pharmaceutical giant has risen over 22% in the past six weeks, outpacing broader market gains and raising concerns about valuation pressure.
- J&J stock up 22.3% since December 1, 2025
- P/E ratio at 26.8, above 5-year average of 19.4
- Q4 2025 adjusted EPS of $5.12
- Trading volume surged 41% above 30-day average
- Cramer calls rally 'unsustainable' at current pace
- Company’s fundamentals support long-term upside, but not immediate momentum
Johnson & Johnson's stock has climbed 22.3% since December 1, 2025, accelerating sharply in January 2026 amid renewed investor confidence in its diversified healthcare portfolio. Cramer, known for his sharp market commentary, stated the company 'deserves to be going higher' due to its resilient pharmaceutical pipeline, steady consumer health revenue, and consistent dividend history. However, he cautioned that the pace of the rally—exceeding 10% in the last 14 trading days alone—has created a disconnect between market momentum and company fundamentals. Cramer pointed to the stock's current price-to-earnings ratio of 26.8, well above its 5-year average of 19.4, as a sign of potential overvaluation. He noted that while J&J’s adjusted earnings per share reached $5.12 in Q4 2025, the share price surge has already priced in aggressive future growth projections not yet supported by forward guidance. The rapid ascent has drawn attention from institutional investors and prompted a wave of retail interest, with trading volume spiking 41% above its 30-day average. Cramer advised caution, urging investors to avoid chasing the stock at current levels and to reassess entry points once momentum cools. He emphasized that meaningful gains could still materialize, but only if the market returns to a more balanced, fundamentals-driven trajectory.