Johnson & Johnson (JNJ) Gains As Market Dips: What You Should Know

Zacks Equity Research
A.O. Smith (AOS) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

In the latest trading session, Johnson & Johnson (JNJ) closed at $138.76, marking a +0.46% move from the previous day. This move outpaced the S&P 500's daily loss of 0.28%. Elsewhere, the Dow lost 0.39%, while the tech-heavy Nasdaq lost 0.45%.

Coming into today, shares of the world's biggest maker of health care products had lost 1.27% in the past month. In that same time, the Medical sector gained 3.34%, while the S&P 500 lost 1.21%.

Wall Street will be looking for positivity from JNJ as it approaches its next earnings report date. In that report, analysts expect JNJ to post earnings of $2.42 per share. This would mark year-over-year growth of 15.24%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.32 billion, down 2.43% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.60 per share and revenue of $81.20 billion. These totals would mark changes of +5.13% and -0.46%, respectively, from last year.

Any recent changes to analyst estimates for JNJ should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 0.04% higher within the past month. JNJ currently has a Zacks Rank of #3 (Hold).

Digging into valuation, JNJ currently has a Forward P/E ratio of 16.06. Its industry sports an average Forward P/E of 14.46, so we one might conclude that JNJ is trading at a premium comparatively.

Also, we should mention that JNJ has a PEG ratio of 2.39. 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. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 2.05 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 57, which puts it in the top 23% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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