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

Zacks Equity Research
·3 min read

Johnson & Johnson (JNJ) closed the most recent trading day at $154.14, moving +0.62% from the previous trading session. This change outpaced the S&P 500's 0.22% loss on the day. Meanwhile, the Dow lost 0.23%, and the Nasdaq, a tech-heavy index, lost 0.38%.

Prior to today's trading, shares of the world's biggest maker of health care products had gained 5.88% over the past month. This has outpaced the Medical sector's gain of 3.32% and the S&P 500's gain of 2.78% in that time.

Investors will be hoping for strength from JNJ as it approaches its next earnings release, which is expected to be January 26, 2021. On that day, JNJ is projected to report earnings of $1.82 per share, which would represent a year-over-year decline of 3.19%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $21.82 billion, up 5.16% from the year-ago period.

JNJ's full-year Zacks Consensus Estimates are calling for earnings of $7.99 per share and revenue of $81.93 billion. These results would represent year-over-year changes of -7.95% and -0.16%, respectively.

Any recent changes to analyst estimates for JNJ should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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. Within the past 30 days, our consensus EPS projection has moved 0.03% lower. JNJ is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, JNJ currently has a Forward P/E ratio of 19.18. For comparison, its industry has an average Forward P/E of 13.8, which means JNJ is trading at a premium to the group.

Also, we should mention that JNJ has a PEG ratio of 3.3. 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 was holding an average PEG ratio of 2.19 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 122, which puts it in the top 48% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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