Johnson & Johnson (JNJ): One Potential Roadblock for the Stock’s ‘Run-Up’

If you’re looking for a textbook example of a steady rise in shares, it doesn’t get much better than the current Johnson & Johnson (NYSE:JNJ) stock run-up.

Johnson & Johnson (NYSE:JNJ)

Shares in the blue-chip company are up 15% year-to-date with a nice upward trend.

JNJ Chart

JNJ data by YCharts.

The chart definitely shows a good run for J&J. But could there be a roadblock ahead that will put a damper on these steady gains?

What won’t get in the way
There are several factors that could hurt other stocks that shouldn’t be an issue for Johnson & Johnson (NYSE:JNJ). For example. AbbVie Inc (NYSE:ABBV) is highly dependent on the success of one drug — Humira. Although sales for the blockbuster drug continue to experience solid growth, any blip would send AbbVie’s shares headed downward.

Johnson & Johnson (NYSE:JNJ)’s diversification prevents that type of problem from raising its ugly head. The company’s revenue is spread across three large operating segments. Its consumer segment brought in $14.4 billion in sales last year. J&J’s pharmaceuticals segment made $25.3 billion, with the biggest-selling drug, Remicade, accounting for only $6.1 billion of that total. The largest business segment, medical devices and diagnostics, generated $27.4 billion in 2012 revenue.

Product recalls usually hurt companies. Covidien plc (NYSE:COV)‘s shares were temporarily affected by the company’s recall of surgical tools last year. Johnson & Johnson stock took a hit in 2010 and early 2011 partially due to recalls of several products.

However, the company’s latest recall doesn’t seem to have fazed the stock. In late March, Johnson & Johnson (NYSE:JNJ) announced that it was pulling nearly 2 million glucose meters from the market after a patient in Europe died following a faulty blood sugar reading. Shares continued their upward path even after this recall announcement.

The most likely roadblock
So what is the most likely impediment to Johnson & Johnson stock success? The answer: Its continued stock success.

After a great start to 2013 and a gain of 27% over the last 12 months, some investors could be ready to take some profits. That’s more likely as we approach summer. Many still subscribe to the old “sell in May and go away” school of thought. Concerns about the employment outlook and global political uncertainties could also contribute to increased selling.