With long-time running pharmaceutical company Johnson & Johnson (NYSE:$JNJ) seeing some promising rises in its shares, many investors have quite a bullish view on the company’s stock.

However, some investors still have a bearish view on the stock based on the three key arguments below.

Not enough drugs set to getting into markets any time soon

While Johnson & Johnson has quite an impressive pipeline, with additional indication on its way for current drugs such as Dazalex, Imbruvica, Invokana, Stelara, and Xarelto — as well as several promising new products on its way including Tremfya (guselkumab), a drug aimed to treat psoriasis, and sirukumab, a drug aimed to treat rheumatoid arthritis — it doesn’t seem like these drugs can be put into markets soon enough to help Johnson & Johnson overcome some of its current challenges.

One of these challenges is the rise of competitor Pfizer (NYSE:$PFE), marketing a drug similar to Johnson & Johnson’s Remicade (branded Inflectra in the U.S. and Remsima in Europe). While Pfizer’s drug only accounted for $78 million in the company’s first-quarter sales and Johnson & Johnson saw almost $1.7 billion with the sales of Remicade, it is most likely only a matter of time before Johnson & Johnson really sees Pfizer’s drug rise above and beyond Remicade.

Besides competition, year-over-years have fallen in the company’s first quarter sales for several drugs such as Invokana, Procrit, Xarelto, and Zytiga. Total pharmaceutical sales in the first quarter also only increased by a disappointing 0.8% from the quarter in the previous year.

Johnson & Johnson might have at least 10 new drugs by 2021 ready to be marketed or filed for FDA approval but its current drug sales is not helping the company grow in any significant way.

Consumer and medical devices segments slow but still beat pharmaceuticals

Johnson & Johnson’s consumer and medical devices segments outperformed the company’s pharmaceutical growth in the first quarter of the year. This can be an especially troubling sign for investors, particularly with the fact that neither the consumer product nor medical devices segment saw significant growth.

Consumer product sales grew an overall of 1% compared to the first quarter of 2016, while sales of medical devices increased 3% in year-over-year sales. With such small numbers, it is even more disappointing to learn that Johnson & Johnson bought some of the growths of the segments — consumer sales improved with the company’s purchase of Vogue International last year, and an acquisition of Abbott Medical Optics from Abbott Labs (NYSE:$ABT) in February helped the medical devices sales.

While growth is better than no growth — or even worse, a revenue that does not exceed the company’s spendings — investors should be cautious with Johnson & Johnson’s stocks. The company’s consumer and medical devices business segments shouldn’t be expected to aid with the struggling pharmaceutical business segment.

Potential is increasing share price, not current situations

Recent rise in Johnson & Johnson’s stock has made the company’s valuation higher — almost reaching its highest level in the past 10 years.
However, some of the main causes of the rise in share prices could be because of uncertain factors such as the anticipated approval for Tremfya. If so, the company’s rising stocks could fall dramatically if the drug does not get approved somehow.

Changing minds?

Could these three arguments change someone’s bull perspective on the pharmaceutical company’s stock to a bearish one? Most likely not. As investors, many know it is better to have long-term perspectives on stocks — and Johnson & Johnson looks pretty promising in the long term.

There may be stocks that have more potential for growth, valued higher, and have better dividend yields, but Johnson & Johnson looks like a pretty good addition to almost any investment portfolios with its long term potential and promising pipeline.

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