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Johnson & Johnson (JNJ) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
·3-min read

In the latest trading session, Johnson & Johnson (JNJ) closed at $163.39, marking a -0.88% move from the previous day. This change lagged the S&P 500's daily gain of 0.02%.

Heading into today, shares of the world's biggest maker of health care products had lost 3.19% over the past month, lagging the Medical sector's gain of 1.17% and the S&P 500's gain of 0.04% in that time.

Investors will be hoping for strength from JNJ as it approaches its next earnings release. In that report, analysts expect JNJ to post earnings of $2.28 per share. This would mark year-over-year growth of 36.53%. Meanwhile, our latest consensus estimate is calling for revenue of $22.27 billion, up 21.45% from the prior-year quarter.

JNJ's full-year Zacks Consensus Estimates are calling for earnings of $9.51 per share and revenue of $91.77 billion. These results would represent year-over-year changes of +18.43% and +11.13%, respectively.

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Investors might also notice recent changes to analyst estimates for JNJ. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% lower. JNJ is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that JNJ has a Forward P/E ratio of 17.34 right now. Its industry sports an average Forward P/E of 14.15, so we one might conclude that JNJ is trading at a premium comparatively.

Investors should also note that JNJ has a PEG ratio of 2.65 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 2.05 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 186, putting it in the bottom 27% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research