Johnson & Johnson on Tuesday validated our decision to make it our newest Club stock, delivering a beat-and-raise quarter led by its most important growth medicines. Revenue in the first quarter rose 9.9% year over year to $24.06 billion, beating the LSEG consensus of $23.63 billion. When excluding foreign-exchange benefits, revenue grew 6.4% on an operational basis. Adjusted earnings per share (EPS) in the January-to-March period totaled $2.70, ahead of the $2.66 expectation, LSEG data showed. Shares of J & J rose about 1% Tuesday, shaking off their premarket declines. JNJ XLV 1Y mountain Johnson & Johnson's 12-month stock performance versus the broader S & P 500 health-care sector. Bottom line A week ago, we decided to upgrade our health-care holdings by exiting Bristol Myers Squibb and starting a position in Johnson & Johnson. Our basic rationale: Yes, Bristol Myers' stock had become less problematic in recent months, but we didn't want to settle for less problematic. We wanted to own something with rosier growth prospects and a trusted leadership team. Johnson & Johnson, which boasts exciting products and a pipeline in lucrative sectors of the pharmaceutical and medical technology industries, such as oncology, autoimmune diseases, and heart conditions — and a few years ago spun off its staid consumer-health business into a new company called Kenvue — checks both of those boxes. "I do think it's terrific," Jim Cramer said of Tuesday's results. Beyond the top and bottom line beats and raised guidance, the biggest first-quarter highlights are the performance of blood-cancer therapy Darzalex and Tremfya, an injectable treatment for autoimmune conditions that affect the skin, such as plaque psoriasis, and, more recently, those that disrupt the digestive tract, such as Crohn's disease and ulcerative colitis. Darzalex sales rose 22.5% from a year ago to $3.96 billion in the quarter, ahead of the $3.87 billion consensus, according to FactSet. Darzalex's revenue growth in recent years has benefited from moving into earlier lines of treatment and the launch of an easier way to administer the medicine to patients. The use of Darzalex in combination with therapies such as J & J's own Tecvayli is another driver to watch. Tremfya sales jumped 68% to $1.61 billion, topping the FactSet consensus of $1.43 billion. Tremfya's approvals to treat those digestive conditions — falling under the umbrella of inflammatory bowel disease (IBD) — within the past two years have accelerated the drug's expansion. Another crucial part of the J & J story is the launch of the daily psoriasis pill Icotyde, which received approval from the Food and Drug Administration last month . It was the No. 1 topic on Tuesday's earnings call Q & A — and for good reason. Icoytde belongs to the same class of drugs as Tremfya and rival shots like AbbVie's Skyrizi, known as IL-23 inhibitors. But its distinguishing feature is that it is the first oral version on the market. In his prepared remarks, CEO Joaquin Duato said Icotyde has the "potential to be one of our largest products ever." J & J's best-selling drug of all time is Stelara, which, at its peak in 2023, generated $10.86 billion in sales. Jennifer Taubert, the chair of J & J's Innovative Medicine division, said the first prescription for Icotyde was written within 24 hours of its FDA approval, and now roughly 1,500 prescriptions have been written. She said she sees Icotyde and Tremfya combined as the best "one-two punch" to treat psoriasis. Plus, J & J is studying Icotyde as a treatment for Crohn's disease and ulcerative colitis, representing a larger market opportunity down the road, on a trajectory similar to Tremfya's expanding approvals. As for J & J's MedTech segment, total revenue of $8.64 billion exceeded the consensus of $8.59 billion. But we'd mostly characterize the results as just OK, up 4.6% year over year when excluding currency translation benefits. There are some exciting parts to the MedTech business — most notably its Ottava robotic surgery system as J & J seeks to enter a market long dominated by Intuitive Surgical's da Vinci systems. J & J submitted Ottava to the FDA for review in January. The main blemish on J & J's report was back on the drug side of the business: the aforementioned Stelara, which lost patent protection last year and is facing competition from cheaper biosimilars. That's how you end up with revenue falling almost 60% year over year to $656 million. The upshot is this isn't coming out of nowhere. Analysts and investors alike are well aware of Stelara's drag on growth — and arguably that's what makes Tuesday's results so encouraging. J & J is delivering solid results while navigating the Stelara patent cliff. As that gets further into the rearview mirror, the spotlight on its faster-growing products will shine brighter, and its overall growth rate is poised to accelerate, helping to justify the stock's expanding price-to-earnings multiple. J & J shares are now trading at 20 times forward earnings, up from the mid-to-low teens two years ago when legal overhangs dominated the conversation, and the Stelara collapse hadn't happened yet. In that stretch, the stock has climbed about 63%, ahead of the S & P 500's roughly 34% advance and trouncing the health-care sector's almost 8% gain. "As good as the stock run has been, I think we're just getting started," finance chief Joe Wolk told CNBC's "Squawk Box" on Tuesday morning. "If you look at our portfolio, it's almost largely derisked now. We don't have a patent cliff looming." J & J executives have recently been adamant that they have a "line of sight" to double-digit revenue growth by the end of the decade. They doubled down on that again on Tuesday. Duato conceded it is fair to ask how a company on track to do over $100 billion in sales this year will be able to achieve that level of growth — after all, 18-wheeler trucks don't accelerate quite like a Mustang. But the CEO said the company's outlook is "grounded in reality." As of now, Wall Street is a bit skeptical. The consensus estimates available to us in FactSet see its annual revenue growth peaking at 8.3% in 2028, followed by 7.2% and 7.9% in 2029 and 2030, respectively. Whether J & J can make good on this double-digit forecast will be one of the fiercest debates surrounding the stock going forward. Its plan to shed its slower-growing orthopedics business within its MedTech segment should help. It could also make some acquisitions. But ultimately, J & J needs to execute on its existing product portfolio and pipeline to achieve it. The more confidence investors get on its achievability, the better for the stock. On that note, J & J announced Tuesday that it plans to hold a business review meeting on Dec. 8, where it will provide additional details on its growth targets. Put that in the catalyst camp, though it's still a ways out. For now, we're reiterating our buy-equivalent 1 rating and price target of $265 a share. Guidance J & J raised its full-year guidance across several metrics. It's still early in the year, so we're not talking about massive increases. But it's still notable and will hopefully keep J & J in a position to deliver additional raises later in the year, as it did in 2025. "We're actually raising guidance on expectations we just set in January amidst all this uncertainty. We leaned in, knowing investors are expecting more from us," Wolk told CNBC. Here's where it stands now versus its January 2026 outlook: Operational sales growth in the range of 5.9% to 6.9%, up from 5.7% to 6.7%. Reported sales between $100.3 billion and $101.3 billion, up from $100 billion to $101 billion. The new midpoint implies 7% year-over-year growth. Adjusted EPS on a reported basis is in the range of $11.45 to $11.65, up from $11.43 to $11.63. At the midpoint, that implies 7.1% growth, up from 6.9% previously. J & J continues to expect adjusted pre-tax operating margin expansion of at least 50 basis points from the prior year. It also left its outlook unchanged for net interest expense ($300 million to $400 million) and the effective tax rate (17.5% to 18.5%). (Jim Cramer's Charitable Trust is long JNJ. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. 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