Johnson & Johnson (JNJ) closed at $165.01 in the latest trading session, marking a -0.62% move from the prior day. This change lagged the S&P 500’s daily loss of 0.32%. At the same time, the Dow lost 0.32%, and the tech-heavy Nasdaq lost 0.11%.
Coming into today, shares of the world’s biggest maker of health care products had gained 4.22% in the past month. In that same time, the Medical sector gained 0.15%, while the S&P 500 gained 4.4%.
Investors will be hoping for strength from JNJ as it approaches its next earnings release, which is expected to be April 20, 2021. In that report, analysts expect JNJ to post earnings of $2.31 per share. This would mark year-over-year growth of 0.43%. Our most recent consensus estimate is calling for quarterly revenue of $21.82 billion, up 5.45% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $9.48 per share and revenue of $91.25 billion, which would represent changes of +18.06% and +10.49%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for JNJ. Recent revisions tend to reflect the latest near-term business trends. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.01% lower. JNJ is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that JNJ has a Forward P/E ratio of 17.51 right now. For comparison, its industry has an average Forward P/E of 13.44, which means JNJ is trading at a premium to the group.
Also, we should mention that JNJ has a PEG ratio of 2.27. 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 was holding an average PEG ratio of 1.92 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 240, which puts it in the bottom 6% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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