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Johnson & Johnson (JNJ) Gains But Lags Market: What You Should Know

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In the latest trading session, Johnson & Johnson (JNJ - Free Report) closed at $148.89, marking a +0.36% move from the previous day. This change lagged the S&P 500's 0.52% gain on the day. Elsewhere, the Dow gained 0.01%, while the tech-heavy Nasdaq added 1.21%.

Heading into today, shares of the world's biggest maker of health care products had lost 0.43% over the past month, lagging the Medical sector's of 0% and the S&P 500's gain of 0.49% in that time.

Investors will be hoping for strength from JNJ as it approaches its next earnings release. On that day, JNJ is projected to report earnings of $1.98 per share, which would represent a year-over-year decline of 6.6%. Meanwhile, our latest consensus estimate is calling for revenue of $20.40 billion, down 1.57% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.85 per share and revenue of $80.86 billion, which would represent changes of -9.56% and -1.46%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for JNJ. These recent revisions tend to reflect the evolving nature of short-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. 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 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. The Zacks Consensus EPS estimate remained stagnant within the past month. JNJ is currently a Zacks Rank #3 (Hold).

Digging into valuation, JNJ currently has a Forward P/E ratio of 18.9. For comparison, its industry has an average Forward P/E of 14.89, which means JNJ is trading at a premium to the group.

Investors should also note that JNJ has a PEG ratio of 3.29 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 2.06 based on yesterday's closing prices.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 126, which puts it in the top 50% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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