Johnson & Johnson: A Key Player Amid Market Unrest
Markets have experienced continued sell-offs this week as investors assess the implications of new tariffs and rising geopolitical tensions. In this context, Johnson & Johnson JNJ is emerging as a notable stock.
The pharmaceutical leader reached 52-week highs of nearly $170 on Tuesday, marking a +16% increase year to date. With its defensive positioning, JNJ may be a promising opportunity for investors looking for growth.
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Diversification Strengthens J&J’s Position
During periods of economic uncertainty, medical stocks often draw investor interest due to the consistent demand for healthcare services.
Johnson & Johnson’s diversified product lines across various therapeutic areas—including oncology, immunology, and neuroscience—enhance its resilience against market fluctuations. Additionally, its medical device division specializes in operational equipment for orthopedics, advanced surgical procedures, and vision care.
Expectations for 2024 indicate JNJ will generate $88.82 billion in revenue, with a projected 1% growth this year, followed by a further 3% increase to $92.8 billion by 2026.
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Positive Earnings Growth
Johnson & Johnson is projected to see a 6% increase in annual earnings this year, reaching $10.58 per share, up from $9.98 in 2024. Furthermore, FY26 EPS is anticipated to rise by another 4%.
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Evaluating J&J’s Valuation
Currently, JNJ trades at a forward earnings multiple of 15.8X, which is lower than the S&P 500’s average of 22X and the Zacks Large Cap Pharmaceuticals Industry average of 18.1X. Competing firms include AbbVie ABBV, Eli Lilly LLY, and Pfizer PFE.
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JNJ also remains below its decade-long median of 16.4X for forward earnings, with a peak of 20.1X in the past ten years. Notably, the stock’s beta ratio stands at 0.47, indicating less volatility compared to broader market fluctuations.
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Bottom Line
After significant gains this year, Johnson & Johnson holds a Zacks Rank #3 (Hold). The stock is near 52-week highs, which may indicate it’s prudent to wait for better buying opportunities, though further highs are also possible.
Investors may consider holding JNJ as a diversification strategy amid recent market volatility, particularly due to Johnson & Johnson’s consistent growth and appealing valuation.
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Johnson & Johnson (JNJ) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
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This article was originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
