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Johnson & Johnson (JNJ) Stock Drops Despite Market Gains: Important Facts to Note

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Johnson & Johnson (JNJ - Free Report) closed the most recent trading day at $202.48, moving -1.39% from the previous trading session. This change lagged the S&P 500's daily gain of 0.11%. Meanwhile, the Dow experienced a drop of 0.07%, and the technology-dominated Nasdaq saw an increase of 0.22%.

Shares of the world's biggest maker of health care products have appreciated by 10.39% over the course of the past month, outperforming the Medical sector's gain of 7.12%, and the S&P 500's gain of 0.08%.

Analysts and investors alike will be keeping a close eye on the performance of Johnson & Johnson in its upcoming earnings disclosure. The company is expected to report EPS of $2.53, up 24.02% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $24.1 billion, indicating a 7.01% growth compared to the corresponding quarter of the prior year.

JNJ's full-year Zacks Consensus Estimates are calling for earnings of $10.87 per share and revenue of $93.69 billion. These results would represent year-over-year changes of +8.92% and +5.49%, respectively.

Investors should also pay attention to any latest changes in analyst estimates for Johnson & Johnson. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.03% upward. Johnson & Johnson is currently sporting a Zacks Rank of #3 (Hold).

From a valuation perspective, Johnson & Johnson is currently exchanging hands at a Forward P/E ratio of 18.9. Its industry sports an average Forward P/E of 13.29, so one might conclude that Johnson & Johnson is trading at a premium comparatively.

It's also important to note that JNJ currently trades at a PEG ratio of 2.29. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Large Cap Pharmaceuticals industry had an average PEG ratio of 1.62.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 185, putting it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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 use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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