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

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Johnson & Johnson (JNJ - Free Report) closed at $163.36 in the latest trading session, marking a +0.26% move from the prior day. This move lagged the S&P 500's daily gain of 2.07%. At the same time, the Dow added 1.4%, and the tech-heavy Nasdaq gained 0.49%.

Heading into today, shares of the world's biggest maker of health care products had gained 0.04% over the past month, outpacing the Medical sector's loss of 5.81% and the S&P 500's loss of 2.08% in that time.

Investors will be hoping for strength from Johnson & Johnson as it approaches its next earnings release, which is expected to be January 25, 2022. On that day, Johnson & Johnson is projected to report earnings of $2.12 per share, which would represent year-over-year growth of 13.98%. Our most recent consensus estimate is calling for quarterly revenue of $25.26 billion, up 12.37% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.78 per share and revenue of $94.23 billion, which would represent changes of +21.79% and +14.1%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Johnson & Johnson. 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. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.02% lower within the past month. Johnson & Johnson currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Johnson & Johnson is currently trading at a Forward P/E ratio of 16.66. For comparison, its industry has an average Forward P/E of 12.73, which means Johnson & Johnson is trading at a premium to the group.

Also, we should mention that JNJ has a PEG ratio of 2.38. 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 industry currently had an average PEG ratio of 1.94 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 85, putting it in the top 34% 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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