Johnson & Johnson researches and develops, manufactures, and sells various products in the health-care field worldwide. It operates in three segments: Consumer, Pharmaceutical, and Medical Devices. Some of its well-known brands include Tylenol-fever, Listerine-bad breath, Splenda-no-calorie sweetener, Neutrogena-skin care, Pepcid-heartburn, Zyrtec - allergy, Motrin-ibuprofen, Sudafed-allergy, and plenty more. The company was founded in 1885 and is based in New Brunswick, New Jersey.
JNJ Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for JNJ, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Johnson & Johnson ranked in the 30th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 35.33%. In terms of the factors that were most noteworthy in this DCF analysis for JNJ, they are:
The company has produced more trailing twelve month cash flow than 98.48% of its sector Healthcare.
The business' balance sheet reveals debt to be 8% of the company's capital (with equity being the remaining amount). Approximately only 17.63% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
JNJ's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 49.65% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Healthcare that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as JNJ, try HBIO, GSK, HSIC, PDLI, and SGRY.