Johnson & Johnson (JNJ) closed at $158.13 in the latest trading session, marking a -0.78% move from the prior day. This change lagged the S&P 500's 0.04% gain on the day. Meanwhile, the Dow gained 0.19%, and the Nasdaq, a tech-heavy index, added 0.28%.
Prior to today's trading, shares of the world's biggest maker of health care products had gained 6.91% over the past month. This has outpaced the Medical sector's gain of 2.37% and the S&P 500's gain of 3.84% 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. 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.
Investors might also notice recent changes to analyst estimates for JNJ. 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. 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 0.19% lower within the past month. JNJ is currently a Zacks Rank #3 (Hold).
Digging into valuation, JNJ currently has a Forward P/E ratio of 17.93. Its industry sports an average Forward P/E of 14.25, so we one might conclude that JNJ is trading at a premium comparatively.
Also, we should mention that JNJ has a PEG ratio of 3.09. 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 2.08 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 126, putting it in the top 50% 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.
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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