In the latest trading session, Johnson & Johnson (JNJ - Free Report) closed at $129.36, marking a +0.84% move from the previous day. This move lagged the S&P 500's daily gain of 1.07%. At the same time, the Dow added 0.65%, and the tech-heavy Nasdaq gained 1.71%.
Prior to today's trading, shares of the world's biggest maker of health care products had lost 0.67% over the past month. This has was narrower than the Medical sector's loss of 2.4% and lagged the S&P 500's loss of 0.58% in that time.
JNJ will be looking to display strength as it nears its next earnings release, which is expected to be January 22, 2019. The company is expected to report EPS of $1.95, up 12.07% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.11 billion, down 0.42% from the year-ago period.
It is also important to note the recent changes to analyst estimates for JNJ. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.3% lower. JNJ is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note JNJ's current valuation metrics, including its Forward P/E ratio of 14.87. Its industry sports an average Forward P/E of 14.41, so we one might conclude that JNJ is trading at a premium comparatively.
It is also worth noting that JNJ currently has a PEG ratio of 1.9. 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. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 1.9 as of yesterday's close.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 29, putting it in the top 12% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.