Johnson & Johnson (JNJ) Gains But Lags Market: What You Should Know

In the latest trading session, Johnson & Johnson (JNJ) closed at $152.30, marking a +0.16% move from the previous day. The stock lagged the S&P 500's daily gain of 1.02%. At the same time, the Dow added 0.3%, and the tech-heavy Nasdaq gained 1.73%.

Heading into today, shares of the world's biggest maker of health care products had gained 3.56% over the past month, outpacing the Medical sector's gain of 1.3% and lagging the S&P 500's gain of 7.25% in that time.

JNJ will be looking to display strength as it nears its next earnings release. On that day, JNJ is projected to report earnings of $1.98 per share, which would represent a year-over-year decline of 6.6%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.40 billion, down 1.57% from the year-ago period.

JNJ's full-year Zacks Consensus Estimates are calling for earnings of $7.85 per share and revenue of $80.86 billion. These results would represent year-over-year changes of -9.56% and -1.46%, respectively.

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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. 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 19.37. For comparison, its industry has an average Forward P/E of 14.93, which means JNJ is trading at a premium to the group.

We can also see that JNJ currently has a PEG ratio of 3.37. 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. JNJ's industry had an average PEG ratio of 2.07 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 190, which puts it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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