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Johnson & Johnson (JNJ) closed at $162.38 in the latest trading session, marking a -0.25% move from the prior day. This change lagged the S&P 500's daily gain of 1.39%. Elsewhere, the Dow gained 0.83%, while the tech-heavy Nasdaq added 1.97%.
Heading into today, shares of the world's biggest maker of health care products had gained 6.59% over the past month, outpacing the Medical sector's gain of 2.58% and the S&P 500's gain of 2.58% 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 January 26, 2021. In that report, analysts expect JNJ to post earnings of $1.82 per share. This would mark a year-over-year decline of 3.19%. Our most recent consensus estimate is calling for quarterly revenue of $21.73 billion, up 4.76% from the year-ago period.
It is also important to note the recent changes to analyst estimates for JNJ. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
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, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.06% lower. JNJ is currently a Zacks Rank #3 (Hold).
Investors should also note JNJ's current valuation metrics, including its Forward P/E ratio of 18.04. This represents a premium compared to its industry's average Forward P/E of 14.19.
Also, we should mention that JNJ has a PEG ratio of 3.11. 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. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 2.1 based on yesterday's closing prices.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 199, putting it in the bottom 22% 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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