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Johnson & Johnson (JNJ) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
In the latest trading session, McDonald's (MCD) closed at $195.26, marking a +0.69% move from the previous day.

Johnson & Johnson (JNJ) closed at $136.61 in the latest trading session, marking a -0.22% move from the prior day. This change lagged the S&P 500's 0.08% loss on the day. Elsewhere, the Dow gained 0.06%, while the tech-heavy Nasdaq lost 0.07%.

Prior to today's trading, shares of the world's biggest maker of health care products had gained 1.1% over the past month. This has outpaced the Medical sector's loss of 0.22% and the S&P 500's gain of 0.52% in that time.

Wall Street will be looking for positivity from JNJ as it approaches its next earnings report date. This is expected to be April 16, 2019. In that report, analysts expect JNJ to post earnings of $2.07 per share. This would mark year-over-year growth of 0.49%. Meanwhile, our latest consensus estimate is calling for revenue of $19.67 billion, down 1.7% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.57 per share and revenue of $81.25 billion, which would represent changes of +4.77% and -0.4%, respectively, from the prior year.

Any recent changes to analyst estimates for JNJ should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. JNJ is currently a Zacks Rank #3 (Hold).

Investors should also note JNJ's current valuation metrics, including its Forward P/E ratio of 15.97. This valuation marks a premium compared to its industry's average Forward P/E of 15.3.

Investors should also note that JNJ has a PEG ratio of 2.1 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 2.13 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 158, putting it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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