Johnson & Johnson (NYSE: JNJ) is being touted as a better investment option when compared to Tesla (NASDAQ: TSLA) due to various factors such as valuation, historical revenue growth, returns, and profitability. JNJ has outperformed TSLA in the last three years, with JNJ stock remaining relatively stable while TSLA stock has seen a significant decline. Tesla, on the other hand, has shown better revenue growth compared to J&J, with an 80% increase between 2021 and 2023.
JNJ’s revenue growth has been driven by its pharmaceuticals and medical devices businesses, with key growth drivers such as Darzalex and Stelara. However, the impending loss of market exclusivity for Stelara in 2025 is expected to weigh down pharmaceutical sales growth. In contrast, Tesla’s revenue growth has been fueled by a significant increase in consumer vehicle deliveries. Despite this, the latest quarter has seen a decline in Tesla’s quarterly deliveries due to various factors such as high-interest rates and increased competition.
When it comes to profitability, JNJ is more profitable than Tesla, with a higher operating margin. However, Tesla has a better financial position with lower debt as a percentage of equity and higher cash as a percentage of assets. Looking at prospects, JNJ is believed to be the better choice due to its lower valuation. Analysts estimate JNJ’s valuation to be $180 per share, reflecting over 20% upside from its current levels, while Tesla’s valuation is estimated to be $177, aligning with its current market price.
Overall, while JNJ may outperform TSLA in the next three years, it is important to consider how Johnson & Johnson’s peers fare on metrics that matter. The pharmaceuticals giant is seen as better placed with an attractive valuation and strong demand for its medical devices business. Despite the positive catalyst of Tesla’s truck rollout in 2026, headwinds such as increased competition and pressure on margins are likely to limit its upside in the near term. Investors are advised to consider these factors and make informed decisions when choosing between JNJ and TSLA for their investment portfolios.
