Performance Comparison: Johnson & Johnson And Competitors In Pharmaceuticals Industry

In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Johnson & Johnson (NYSE:JNJ) in comparison to its major competitors within the Pharmaceuticals industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.

Johnson & Johnson Background

Johnson & Johnson is the world's largest and most diverse healthcare firm. It has two divisions: pharmaceutical and medical devices. These now represent all of the company's sales following the divestment of the consumer business, Kenvue, in 2023. The drug division focuses on the following therapeutic areas: immunology, oncology, neurology, pulmonary, cardiology, and metabolic diseases. Geographically, just over half of total revenue is generated in the United States.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
Johnson & Johnson 21.79 5.04 4.31 4.69% $5.68 $14.87 2.34%
Eli Lilly and Co 120.82 60.85 20.63 19.02% $3.12 $7.09 25.98%
Novo Nordisk A/S 46.93 42.08 17.15 24.73% $36.91 $55.43 22.45%
Merck & Co Inc 139.49 7.88 5.20 12.22% $6.96 $12.23 8.89%
AstraZeneca PLC 38.53 6.46 5.12 5.69% $4.47 $10.46 16.55%
Novartis AG 23.44 5.30 4.49 6.23% $4.66 $9.02 9.71%
GSK PLC 16.20 5.19 2.36 2.64% $2.07 $5.39 9.16%
Zoetis Inc 32.67 15.30 8.95 11.91% $0.93 $1.55 9.5%
Takeda Pharmaceutical Co Ltd 46.16 0.91 1.56 -0.04% $186.41 $668.37 -5.43%
Dr Reddy's Laboratories Ltd 17.11 3.37 3.42 4.76% $20.32 $49.91 -1.83%
Jazz Pharmaceuticals PLC 21.79 1.79 1.90 -0.39% $0.23 $0.81 1.03%
Prestige Consumer Healthcare Inc 15.42 1.94 2.87 3.04% $0.09 $0.15 -3.11%
Corcept Therapeutics Inc 28.73 5.73 6.36 5.22% $0.03 $0.14 38.95%
Indivior PLC 458 246.88 2.30 940.0% $0.08 $0.24 12.25%
Average 77.33 31.05 6.33 79.62% $20.48 $63.14 11.08%

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By carefully studying Johnson & Johnson, we can deduce the following trends:

A Price to Earnings ratio of 21.79 significantly below the industry average by 0.28x suggests undervaluation. This can make the stock appealing for those seeking growth.

Considering a Price to Book ratio of 5.04, which is well below the industry average by 0.16x, the stock may be undervalued based on its book value compared to its peers.

The Price to Sales ratio is 4.31, which is 0.68x the industry average. This suggests a possible undervaluation based on sales performance.

The Return on Equity (ROE) of 4.69% is 74.93% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.

Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $5.68 Billion, which is 0.28x below the industry average, potentially indicating lower profitability or financial challenges.

The company has lower gross profit of $14.87 Billion, which indicates 0.24x below the industry average. This potentially indicates lower revenue after accounting for production costs.

The company is witnessing a substantial decline in revenue growth, with a rate of 2.34% compared to the industry average of 11.08%, which indicates a challenging sales environment.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

By evaluating Johnson & Johnson against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:

Johnson & Johnson is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.48.

This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.

Key Takeaways

For Johnson & Johnson in the Pharmaceuticals industry, the PE, PB, and PS ratios are all low compared to peers, indicating potential undervaluation. However, the low ROE, EBITDA, gross profit, and revenue growth suggest underperformance relative to industry standards. This may indicate a need for further analysis to understand the company's competitive position within the sector.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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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