Since June of 2012, JNJ share price has risen 70%. The conservative earnings growth forecast signals that steep rate of increase will not be sustained. JNJ will remain a solid income stock, and will continue to grow in proportion to its earnings. But, it will not continue to be an aggressive growth stock. For growth investors, the JNJ party is over, and they will be rotating out of it and into something else. I bought it based on value and income, and I'll hold on the same basis. Maybe the party isn't over. But the band has quit playing, and the bar has called last round. You can stay, but it's going to be quiet and boring.
The stock went up in 2012 because we have get rid the worst chairman in J&J history. It was a smart move even we paid him over $143M to retire. Wish we have done it sooner.
Agree with you steep climb in stock price may be over, but 7-10% annual growth + 2.5% dividend is achievable.
7-10% annual growth is not a sustainable rate. At 10% growth, the share price doubles every 7 years, meaning that from today's price, JNJ shares would be at $840/share by 2035. And $1680 by 2042. $3360 by 2049. Not going to happen, can't happen, can't happen for any large company. How could JNJ double its earnings every 7 years? I would be more comfortable predicting growth slightly greater than the rate of inflation, something on the order of 3-4%, doubling every 18-23 years.