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Buy Johnson & Johnson (JNJ) Stock for Higher Highs?
Markets have continued to sell off this week as investors digest ensuing tariff implications and rising geopolitical tensions. That said, one stock that continues to stand out is Johnson & Johnson (JNJ - Free Report) .
The pharmaceutical giant's stock hit new 52-week highs of nearly $170 on Tuesday, with JNJ now up +16% year to date. Seemingly acting as a defensive hedge against recent market volatility, let's see if it's time to buy JNJ shares for higher highs.
Image Source: Zacks Investment Research
J&J’s Diversification
Of course, medical stocks are often sought during broader economic uncertainty as the essentiality of healthcare doesn’t waver.
What strengthens Johnson & Johnson’s defensive capabilities is the company’s diversification within the medical sector. Johnson & Johnson provides a wide range of pharmaceuticals across several therapeutic areas including oncology, immunology, and neuroscience among others.
In addition to this, Johnson & Johnson’s medical device division offers solutions and operational equipment for orthopedics, advanced surgical procedures, and vision care. Bringing in $88.82 billion in 2024, Johnson & Johnson's top line is expected to rise 1% this year and is projected to increase another 3% in fiscal 2026 to $92.8 billion.
Image Source: Zacks Investment Research
EPS Growth
More intriguing, Johnson & Johnson’s annual earnings are slated to rise 6% this year to $10.58 per share, compared to EPS of $9.98 in 2024. Plus, FY26 EPS is projected to increase another 4%.
Image Source: Zacks Investment Research
Monitoring J&J’s Valuation
At current levels, JNJ still trades at a very reasonable 15.8X forward earnings multiple. This is a noticeable discount to the benchmark S&P 500’s 22X and its Zacks Large Cap Pharmaceuticals Industry average of 18.1X, with some other notable names in the space being AbbVie (ABBV - Free Report) , Eli Lilly (LLY - Free Report) and Pfizer (PFE - Free Report) .
Image Source: Zacks Investment Research
JNJ also trades beneath its decade-long median of 16.4X forward earnings with a high of 20.1X over the last 10 years. Less prone to major fluctuations in its valuation, it’s noteworthy that JNJ has a beta ratio under 1.0 (0.47) which suggests this stock should be less volatile than the benchmark when considering market risk.
Image Source: Zacks Investment Research
Bottom Line
After such a sharp YTD rally, Johnson & Johnson stock lands a Zacks Rank #3 (Hold). Near 52-week peaks there could be better buying opportunities for JNJ shares but higher highs wouldn’t be surprising.
To that point, investors may be compelled to hold JNJ as a hedge against recent market volatility, especially considering Johnson & Johnson’s steady growth and reasonable valuation.
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Buy Johnson & Johnson (JNJ) Stock for Higher Highs?
Markets have continued to sell off this week as investors digest ensuing tariff implications and rising geopolitical tensions. That said, one stock that continues to stand out is Johnson & Johnson (JNJ - Free Report) .
The pharmaceutical giant's stock hit new 52-week highs of nearly $170 on Tuesday, with JNJ now up +16% year to date. Seemingly acting as a defensive hedge against recent market volatility, let's see if it's time to buy JNJ shares for higher highs.
Image Source: Zacks Investment Research
J&J’s Diversification
Of course, medical stocks are often sought during broader economic uncertainty as the essentiality of healthcare doesn’t waver.
What strengthens Johnson & Johnson’s defensive capabilities is the company’s diversification within the medical sector. Johnson & Johnson provides a wide range of pharmaceuticals across several therapeutic areas including oncology, immunology, and neuroscience among others.
In addition to this, Johnson & Johnson’s medical device division offers solutions and operational equipment for orthopedics, advanced surgical procedures, and vision care. Bringing in $88.82 billion in 2024, Johnson & Johnson's top line is expected to rise 1% this year and is projected to increase another 3% in fiscal 2026 to $92.8 billion.
Image Source: Zacks Investment Research
EPS Growth
More intriguing, Johnson & Johnson’s annual earnings are slated to rise 6% this year to $10.58 per share, compared to EPS of $9.98 in 2024. Plus, FY26 EPS is projected to increase another 4%.
Image Source: Zacks Investment Research
Monitoring J&J’s Valuation
At current levels, JNJ still trades at a very reasonable 15.8X forward earnings multiple. This is a noticeable discount to the benchmark S&P 500’s 22X and its Zacks Large Cap Pharmaceuticals Industry average of 18.1X, with some other notable names in the space being AbbVie (ABBV - Free Report) , Eli Lilly (LLY - Free Report) and Pfizer (PFE - Free Report) .
Image Source: Zacks Investment Research
JNJ also trades beneath its decade-long median of 16.4X forward earnings with a high of 20.1X over the last 10 years. Less prone to major fluctuations in its valuation, it’s noteworthy that JNJ has a beta ratio under 1.0 (0.47) which suggests this stock should be less volatile than the benchmark when considering market risk.
Image Source: Zacks Investment Research
Bottom Line
After such a sharp YTD rally, Johnson & Johnson stock lands a Zacks Rank #3 (Hold). Near 52-week peaks there could be better buying opportunities for JNJ shares but higher highs wouldn’t be surprising.
To that point, investors may be compelled to hold JNJ as a hedge against recent market volatility, especially considering Johnson & Johnson’s steady growth and reasonable valuation.