In the latest trading session, Johnson & Johnson (JNJ) closed at $149, marking a +0.58% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.06%. Elsewhere, the Dow gained 0.29%, while the tech-heavy Nasdaq added 0.23%.
Coming into today, shares of the world's biggest maker of health care products had gained 6.27% in the past month. In that same time, the Medical sector gained 9.55%, while the S&P 500 gained 11.09%.
JNJ will be looking to display strength as it nears its next earnings release. In that report, analysts expect JNJ to post earnings of $1.82 per share. This would mark a year-over-year decline of 3.19%. Our most recent consensus estimate is calling for quarterly revenue of $21.82 billion, up 5.16% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.99 per share and revenue of $81.92 billion, which would represent changes of -7.95% and -0.17%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for JNJ. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% higher. JNJ is currently a Zacks Rank #3 (Hold).
In terms of valuation, JNJ is currently trading at a Forward P/E ratio of 18.54. This valuation marks a premium compared to its industry's average Forward P/E of 14.36.
We can also see that JNJ currently has a PEG ratio of 3.19. 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. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 2.22 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 185, which puts it in the bottom 28% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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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