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Johnson & Johnson (JNJ) Outpaces Stock Market Gains: What You Should Know

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Johnson & Johnson (JNJ) closed the most recent trading day at $178.34, moving +1.1% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.95%. Elsewhere, the Dow gained 0.8%, while the tech-heavy Nasdaq lost 0.28%.

Heading into today, shares of the world's biggest maker of health care products had lost 0.52% over the past month, lagging the Medical sector's gain of 0.31% and the S&P 500's gain of 0.1% in that time.

Johnson & Johnson will be looking to display strength as it nears its next earnings release, which is expected to be July 19, 2022. On that day, Johnson & Johnson is projected to report earnings of $2.59 per share, which would represent year-over-year growth of 4.44%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $23.99 billion, up 2.93% from the year-ago period.

JNJ's full-year Zacks Consensus Estimates are calling for earnings of $10.23 per share and revenue of $96.62 billion. These results would represent year-over-year changes of +4.39% and +3.04%, respectively.

It is also important to note the recent changes to analyst estimates for Johnson & Johnson. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 has moved 0.33% higher within the past month. Johnson & Johnson is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Johnson & Johnson's current valuation metrics, including its Forward P/E ratio of 17.24. This represents a premium compared to its industry's average Forward P/E of 13.18.

We can also see that JNJ currently has a PEG ratio of 3.49. 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 industry currently had an average PEG ratio of 2.26 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 155, putting it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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