Johnson & Johnson (JNJ) Gains But Lags Market: What You Should Know

Johnson & Johnson (JNJ) closed the most recent trading day at $144.89, moving +0.23% from the previous trading session. This change lagged the S&P 500's 1.48% gain on the day. At the same time, the Dow added 2.21%, and the tech-heavy Nasdaq gained 0.77%.

Investors will be hoping for strength from JNJ as it approaches its next earnings release. The company is expected to report EPS of $1.45, down 43.8% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.33 billion, down 15.73% from the year-ago period.

JNJ's full-year Zacks Consensus Estimates are calling for earnings of $7.68 per share and revenue of $79.48 billion. These results would represent year-over-year changes of -11.52% and -3.14%, respectively.

Investors should also note any recent changes to analyst estimates for JNJ. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. JNJ is holding a Zacks Rank of #4 (Sell) right now.

Valuation is also important, so investors should note that JNJ has a Forward P/E ratio of 18.83 right now. For comparison, its industry has an average Forward P/E of 14.56, which means JNJ is trading at a premium to the group.

It is also worth noting that JNJ currently has a PEG ratio of 3.14. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 1.92 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 14, putting it in the top 6% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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