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Johnson & Johnson (JNJ)
NYSE:JNJ
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Johnson & Johnson
(NYSE:JNJ)78Outperform
Positive Factors
Dividend Policy
Consistent dividend hike for 61 years in a row makes it an attractive stock for investors.
Product Pipeline
JNJ has new product introductions and pipeline news ahead which could drive improving investor perception.
Negative Factors
Patent Expiry
Patent cliff of Stelara (12.8% of sales) could lead to biosimilars, with sales expected to get slashed.
Johnson & Johnson (JNJ) vs. S&P 500 (SPY)
Market Cap
$397.30B
Dividend Yield2.96%
Average Volume (3M)9.60M
Price to Earnings (P/E)28.5
Beta (1Y)0.24
Revenue Growth-4.51%
EPS Growth3.69%
CountryUS
Employees139,800
SectorHealthcare
Sector Strength74
IndustryPharmaceuticals
Share Statistics
EPS (TTM)5.80
Shares Outstanding2,407,616,700
10 Day Avg. Volume10,074,329
30 Day Avg. Volume9,603,778
Financial Highlights & Ratios
PEG Ratio7.71
Price to Book (P/B)N/A
Price to Sales (P/S)4.47
Price to Cash Flow (P/CF)14.20
P/FCF Ratio14.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$167.67Price Target Upside1.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Johnson & Johnson Business Overview & Revenue Model
Company DescriptionJohnson & Johnson provides healthcare products across three segments: Consumer, Pharmaceutical, and Medical Devices. The Consumer segment includes products used in the baby care, oral care, beauty, over-the-counter pharmaceutical, women's health, and wound care markets. The Pharmaceutical segment focuses on therapeutic areas such as immunology, infectious diseases ad vaccines, neuroscience, oncology, cardiovascular and metabolism, and pulmonary hypertension. The Medical Devices segment offers products used in the orthopedic, surgery, cardiovascular, diabetes care, and eye health fields. The company was founded by Robert Wood Johnson I, James Wood Johnson and Edward Mead Johnson Sr. in 1886 and is headquartered in New Brunswick, NJ.
How the Company Makes MoneyJohnson & Johnson generates revenue through a diversified model that includes three major segments: Consumer Health, Pharmaceutical, and Medical Devices. The Pharmaceutical segment is the largest contributor to the company's revenue, driven by the development and sale of innovative prescription drugs and treatments in therapeutic areas like oncology, immunology, and infectious diseases. The Medical Devices segment earns revenue by providing surgical equipment, orthopedic products, and vision care products to healthcare professionals and facilities. The Consumer Health segment sells a variety of over-the-counter medications, skincare products, and personal hygiene items directly to consumers through retail and online channels. Johnson & Johnson's earnings are further supported by strategic partnerships and collaborations with research institutions, other pharmaceutical companies, and healthcare providers to enhance its product offerings and expand its market reach.
Johnson & Johnson Financial Statement Overview
Summary
Johnson & Johnson maintains a commendable financial standing, supported by strong profitability, a solid balance sheet, and substantial cash flow. While the income statement indicates some challenges in revenue growth, the overall financial health remains robust due to minimal leverage and efficient cash generation.Income Statement
Johnson & Johnson demonstrates strong profitability with a solid gross profit margin, driven by consistent revenue generation. However, a recent decline in total revenue suggests potential market challenges. The company's EBIT and EBITDA margins indicate efficient operations but a drop in net income highlights a need for cost control.82
Very Positive
Balance Sheet
The balance sheet is robust with a significant portion of equity relative to total assets, suggesting financial stability. Johnson & Johnson exhibits a low debt level, indicative of prudent financial management, which reduces financial risk. The return on equity shows effective use of shareholder funds, despite a slight decrease in stockholder equity.88
Very Positive
Cash Flow
The cash flow statement reflects healthy operating cash flows, supporting strong free cash flow generation. However, fluctuations in free cash flow growth and significant capital expenditures warrant attention. The operating cash flow to net income ratio remains strong, showcasing effective cash conversion.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 61.35B | 85.16B | 79.99B | 78.74B | 82.58B | Gross Profit |
| 33.88B | 58.61B | 55.39B | 55.34B | 54.16B | EBIT |
| 14.07B | 23.41B | 23.19B | 20.47B | 16.95B | EBITDA |
| 24.78B | 23.73B | 27.17B | 30.93B | 27.50B | Net Income Common Stockholders |
| 14.07B | 35.15B | 17.94B | 20.88B | 14.71B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 24.52B | 22.93B | 22.28B | 31.61B | 25.18B | Total Assets |
| 180.10B | 167.56B | 187.38B | 182.02B | 174.89B | Total Debt |
| 36.63B | 29.33B | 39.64B | 33.75B | 35.27B | Net Debt |
| 12.53B | 7.47B | 26.75B | 19.26B | 21.28B | Total Liabilities |
| 108.61B | 98.78B | 110.57B | 108.00B | 111.62B | Stockholders Equity |
| 12.60M | 68.77B | 76.80B | 74.02B | 63.28B |
| Cash Flow | Free Cash Flow | |||
| 19.84B | 18.25B | 17.18B | 19.76B | 20.19B | Operating Cash Flow |
| 24.27B | 22.79B | 21.19B | 23.41B | 23.54B | Investing Cash Flow |
| -18.60B | 878.00M | -12.37B | -8.68B | -20.82B | Financing Cash Flow |
| -3.13B | -15.82B | -8.87B | -14.05B | -6.12B |
Johnson & Johnson Technical Analysis
Positive
165.42
Price Trends
150.58
Positive
152.35
Positive
152.44
Positive
Market Momentum
4.42
Negative
68.35
Neutral
84.62
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JNJ, the sentiment is Positive. The current price of 165.42 is above the 20-day moving average (MA) of 158.60, above the 50-day MA of 150.58, and above the 200-day MA of 152.44, indicating a bullish trend. The MACD of 4.42 indicates Negative momentum. The RSI at 68.35 is Neutral, neither overbought nor oversold. The STOCH value of 84.62 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JNJ.
Johnson & Johnson Risk Analysis
Johnson & Johnson disclosed 20 risk factors in its most recent earnings report. Johnson & Johnson reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Johnson & Johnson Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $397.30B | 28.50 | 19.68% | 2.96% | -4.51% | 3.69% | |
75 Outperform | $165.49B | 40.75 | 69.59% | 2.94% | 18.64% | -39.39% | |
71 Outperform | $233.03B | 13.69 | 36.96% | 3.35% | 6.85% | 4577.79% | |
71 Outperform | $369.01B | 87.45 | 128.66% | 2.97% | 3.71% | -12.14% | |
69 Neutral | $149.79B | 18.76 | 8.68% | 6.39% | 8.77% | 272.80% | |
60 Neutral | $120.99B | ― | -54.78% | 4.04% | 7.32% | -214.24% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
JNJ
Johnson & Johnson
165.42
10.42
6.72%
AMGN
Amgen
312.19
43.72
16.28%
BMY
Bristol-Myers Squibb
59.44
10.09
20.45%
MRK
Merck & Company
92.56
-27.01
-22.59%
PFE
Pfizer
25.75
1.21
4.93%
ABBV
AbbVie
207.76
34.90
20.19%
Johnson & Johnson Earnings Call Summary
Earnings Call Date: Jan 22, 2025 | % Change Since: 12.55% | Next Earnings Date: Apr 15, 2025
Earnings Call Sentiment Neutral
Johnson & Johnson showed robust growth in sales and innovation in 2024, particularly in the Innovative Medicine and MedTech sectors. However, earnings were negatively impacted by STELARA biosimilars and recent acquisitions, while challenges in China and decreased margins were noted.Highlights
Robust Sales Growth in 2024
Johnson & Johnson reported operational sales growth of 7% for 2024, excluding the COVID-19 vaccine, with Sprabato surpassing $1 billion in annual sales. The company now has 26 platforms generating at least $1 billion in annual revenue.
Strong Performance in Innovative Medicine
Innovative Medicine sales exceeded $14 billion for the third consecutive quarter, driven by double-digit growth in key brands such as DARZALEX, CARVYKTI, and TECVAYLI. Oncology, neuroscience, and pulmonary hypertension segments showed strong growth.
Major Product Approvals and Pipeline Advancements
In 2024, J&J achieved 27 major market approvals and initiated 16 Phase III studies. Notable FDA approvals included TREMFYA for ulcerative colitis and RYBREVANT for non-small cell lung cancer.
Significant Investment in R&D and M&A
Johnson & Johnson invested approximately $50 billion in R&D and M&A in 2024, including the acquisition agreement with Intracellular Therapies, contributing to strategic growth.
MedTech Growth and Innovation
MedTech reported annual sales over $30 billion for the second year, with growth in cardiovascular and vision segments. The company launched 15 major products and acquired ShockWave in the MedTech sector.
Lowlights
Earnings Decline in Q4 2024
Net earnings for Q4 2024 were $3.4 billion with a diluted EPS of $1.41, compared to $1.70 a year ago, representing a decrease of 11.1% in adjusted net earnings.
Impact of STELARA Biosimilars
STELARA sales declined by 13.6% due to biosimilar competition, impacting worldwide growth by 490 basis points.
Negative Impacts from Acquisitions and Currency
The earnings per share in Q4 2024 was negatively impacted by $0.22 due to acquired IPR&D expenses related to the ZWave acquisition. Currency fluctuations also posed challenges.
Challenges in China
Continued macroeconomic pressures in China, including Volume-Based Procurement (VBP), impacted performance in the region.
Decreased Margins in Innovative Medicine and MedTech
Innovative Medicine margin declined from 37.4% to 32.5%, and MedTech margin declined from 15.5% to 10.8%, primarily due to strategic investment and acquired IPR&D expenses.
Company Guidance
During Johnson & Johnson's fourth quarter 2024 earnings call, the guidance for 2025 highlighted an expected operational sales growth of 3%, despite facing significant headwinds, including the introduction of U.S. biosimilars for STELARA and macroeconomic pressures in China. The company is projecting adjusted operational earnings per share growth of nearly 9%. Sales growth is anticipated to be driven by key pharmaceutical assets such as DARZALEX and ERLEADA, alongside recently launched products like CARVYKTI and TECVAYLI. MedTech growth is expected from recent acquisitions such as ShockWave and Abiomed. The 2025 guidance also factors in approximately 50 basis points of favorable impact from acquisitions and divestitures. Despite the challenges, Johnson & Johnson remains confident in its financial outlook, supported by a diversified business model and a robust innovation pipeline.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.