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Johnson & Johnson (JNJ) Dips More Than Broader Markets: What You Should Know

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Johnson & Johnson (JNJ - Free Report) closed the most recent trading day at $177.19, moving -1.27% from the previous trading session. This move lagged the S&P 500's daily loss of 1.08%.

Heading into today, shares of the world's biggest maker of health care products had gained 6.54% over the past month, outpacing the Medical sector's gain of 4.19% and the S&P 500's gain of 2.93% in that time.

JNJ will be looking to display strength as it nears its next earnings release. On that day, JNJ is projected to report earnings of $2.38 per share, which would represent year-over-year growth of 8.18%. Meanwhile, our latest consensus estimate is calling for revenue of $23.68 billion, up 12.31% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.65 per share and revenue of $94.34 billion. These totals would mark changes of +20.17% and +14.23%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for JNJ. These revisions typically reflect the latest short-term business trends, which can change frequently. 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 has moved 1.52% higher within the past month. JNJ is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, JNJ currently has a Forward P/E ratio of 18.59. This valuation marks a premium compared to its industry's average Forward P/E of 15.28.

It is also worth noting that JNJ currently has a PEG ratio of 2.85. 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. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 2.28 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 191, which puts it in the bottom 25% 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.

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