Back to top

Image: Bigstock

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.  

Zacks Investment Research
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.

Zacks Investment Research
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%.

Zacks Investment Research
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) .

Zacks Investment Research
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.

Zacks Investment Research
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.   


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Johnson & Johnson (JNJ) - free report >>

Pfizer Inc. (PFE) - free report >>

Eli Lilly and Company (LLY) - free report >>

AbbVie Inc. (ABBV) - free report >>

Published in