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Commentary

The Week Ahead: Johnson & Johnson, Abbott Laboratories Start Earnings Season

We're also watching for reports from JPMorgan, Bank of America, and other big financial-services names.

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The first quarter has ended, and next week begins with earning reports from Johnson & Johnson (JNJ) on Tuesday, followed by Abbott Laboratories (ABT) on Thursday. 

Big Pharma and Big Biotech are industries that have managed to remain healthy as the coronavirus has devastated the world and economy. Johnson & Johnson, a reigning front-runner across the major healthcare industries, holds leadership roles in diverse healthcare segments. We expect the high need for drugs should support continued demand and supply to shield this wide-moat firm, along with other big drug firms, from the impacts of the coronavirus. With only minor disruptions anticipated, the moat ratings for this industry are not expected to change.

While the concerns of a recession have been voiced globally, the healthcare sector is expected to hold up. Abbott Laboratories has continued to improve on its nutritionals, devices, diagnostics, and established pharmaceuticals. However, there is still progress to be made for the narrow-moat firm. 

We expect BlackRock (BLK) to experience negative effects resulting from the secular and cyclical headwinds of the sell-off in global equity markets. Although this could stunt its near-term assets under management growth, we foresee the wide-moat firm generating 3%-5% average annual organic AUM growth, with similar levels of revenue growth and steadily improving margins during the next five years. 

We will also hear from financial-services giants JPMorgan Chase (JPM), Bank of America (BAC), Morgan Stanley (MS), Goldman Sachs (GS), and Charles Schwab (SCHW).  

For economic data, we will hear updates on retail sales and the Energy Information Administration's crude-oil inventories on Wednesday. Updates on building permits and housing starts, along with EIA's natural gas inventories, will be available on Thursday. 

Carole Hodorowicz does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.