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:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Johnson & Johnson. To summarize, we found that Johnson & Johnson ranked in the 35th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 41.83%. As for the metrics that stood out in our discounted cash flow analysis of Johnson & Johnson, consider:
As a business, JNJ is generating more cash flow than 97.96% of positive cash flow stocks in the Healthcare.
The business' balance sheet reveals debt to be 7% of the company's capital (with equity being the remaining amount). Approximately just 17.18% 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 44.76% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Johnson & Johnson? See ENDP, GSK, PDEX, ZTS, and REGN.
Introduction Johnson & Johnson (JNJ) has long been considered a safe investment. It is not a speculative, high-risk, high-reward type of stock. I would rather call Johnson & Johnson a "set it and forget it" type of investment. You buy the stock and then wait for dividends and capital appreciation...
The groups, which include educational institutions such as Emory University and activist groups such as Greenpeace, among others, also want the company to recall existing inventory in North America. Janette Robinson Flint, the executive director of Black Women for Wellness, said in a statement that J&J's choice to continue marketing baby powder in international markets, often to Black and Brown consumers, contradicts a statement it issued in June committing to fighting racial inequality.
U.S. drugmaker Johnson & Johnson aims to begin clinical testing of its COVID-19 vaccine in the coming weeks and produce billions of doses in 2021, chief executive officer Alex Gorsky said on Wednesday, but cautioned that it will take more than one vaccine to rein in the virus. Gorsky said it was a good thing other companies are experimenting with different approaches to vaccines, in part because different vaccines might work better in different groups of people. "I think it's going to take multiple vaccines."