Johnson & Johnson (JNJ) closed at $144.21 in the latest trading session, marking a -0.61% move from the prior day. This change lagged the S&P 500's 1.05% gain on the day. At the same time, the Dow added 0.52%, and the tech-heavy Nasdaq gained 1.72%.
Prior to today's trading, shares of the world's biggest maker of health care products had lost 4.63% over the past month. This has lagged the Medical sector's loss of 1.66% and the S&P 500's loss of 3.29% in that time.
JNJ will be looking to display strength as it nears its next earnings release, which is expected to be October 13, 2020. In that report, analysts expect JNJ to post earnings of $1.98 per share. This would mark a year-over-year decline of 6.6%. Meanwhile, our latest consensus estimate is calling for revenue of $20.40 billion, down 1.57% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.85 per share and revenue of $80.86 billion. These totals would mark changes of -9.56% and -1.46%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for JNJ. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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 #4 (Sell) right now.
Digging into valuation, JNJ currently has a Forward P/E ratio of 18.48. This valuation marks a premium compared to its industry's average Forward P/E of 14.63.
We can also see that JNJ currently has a PEG ratio of 3.22. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. JNJ's industry had an average PEG ratio of 2.03 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 168, which puts it in the bottom 34% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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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.