What Are Analysts Saying About The Future Of Johnson & Johnson's (NYSE:JNJ)?
On 30 June 2019, Johnson & Johnson (NYSE:JNJ) announced its earnings update. Overall, analysts seem fairly confident, with profits predicted to increase by 20% next year against the past 5-year average growth rate of -13%. With trailing-twelve-month net income at current levels of US$15b, we should see this rise to US$18b in 2020. Below is a brief commentary on the longer term outlook the market has for Johnson & Johnson. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for Johnson & Johnson
How is Johnson & Johnson going to perform in the near future?
Over the next three years, it seems the consensus view of the 19 analysts covering JNJ is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of JNJ's earnings growth over these next few years.
By 2022, JNJ's earnings should reach US$21b, from current levels of US$15b, resulting in an annual growth rate of 7.5%. This leads to an EPS of $8.34 in the final year of projections relative to the current EPS of $5.7. Margins are currently sitting at 19%, which is expected to expand to 23% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Johnson & Johnson, I've compiled three pertinent aspects you should further examine:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is Johnson & Johnson worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Johnson & Johnson is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Johnson & Johnson? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.