Is It Time To Reassess Johnson & Johnson (JNJ) After A 52% One-Year Surge?

Simply Wall St.06-05 21:33

If you are wondering whether Johnson & Johnson stock still offers value after a strong run, the key is to look closely at what the current price implies versus what you are getting as a shareholder. ...

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The share price has slipped about 1.1% over the past week and gained 1.2% over the last 30 days, hinting that views on risk and reward are still shifting.\nRecent headlines around Johnson & Johnson...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU2430703178.SGD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (SGDHDG) INC","LU2602419157.SGD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"AC\" (SGD) ACC","BK4532":"文艺复兴科技持仓","LU1066051225.USD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AC\" (USD) ACC","LU0345770993.USD":"NINETY ONE GSF GLOBAL STRATEGIC EQUITY \"A\" (USD) INC","SG9999001176.USD":"United Global Healthcare Acc USD","LU1057294990.SGD":"Blackrock World Healthscience A2 SGD-H","LU1066053197.SGD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM3\" (SGDHDG) INC","LU1496350502.SGD":"FRANKLIN DIVERSIFIED DYNAMIC \"A\" (SGDHDG) ACC","LU2236285917.USD":"ALLIANZ GLOBAL INCOME \"AMG\" (USD) INC","IE00BLSP4239.USD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis USD Plus","IE00BLSP4452.SGD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis SGD-H Plus","LU0114720955.EUR":"SUSTAINABLE GLOBAL HEALTH CARE \"A\" INC","LU1059921491.USD":"NORDEA 1 GLOBAL STABLE EQUITY \"HB\" (USDHDG) ACC","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU1121112475.USD":"NINETY ONE GSF GLOBAL FRANCHISE \"A\" (USDHDG) ACC","IE000WAW04H5.SGD":"RQI GLOBAL \"I\" (SGD) INC A","LU0210528500.USD":"JPM AMERICA EQUITY \"A\" ACC","BK4533":"AQR资本管理(全球第二大对冲基金)","LU0787776722.HKD":"AB SELECT US EQUITY PORTFOLIO \"A\" (HKD) ACC","LU0432979614.USD":"JPM GLOBAL HEALTHCARE \"A\" ACC","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU2112291526.USD":"BGF WORLD HEALTHSCIENCE \"A4\" (USD) INC","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","SGXZ57979304.SGD":"United Global Healthcare A Acc SGD-H","LU0912757837.SGD":"JPMorgan Investment Funds - Global Income A (mth) SGD-H","LU2089984988.USD":"MANULIFE GF HEALTHCARE \"AA\" (USD) ACC","LU1267930813.SGD":"FRANKLIN TEMPLETON SHARIAH GLOBAL EQUITY \"AS\" (SGD) ACC","IE000BZT7R73.USD":"RQI GLOBAL \"I\" (USD) ACC","LU2471134952.CNY":"INVESCO GLOBAL EQUITY INCOME ADVANTAGE \"A\" (CNYHDG) INC","IE0034235303.USD":"PINEBRIDGE US RESEARCH ENHANCED CORE EQUITY \"A\" (USD) ACC","LU2133065610.SGD":"JPMorgan Investment Funds - Global Dividend A (mth) SGD","LU2505996509.AUD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (AUDHDG) INC","LU2471134879.HKD":"INVESCO GLOBAL EQUITY INCOME ADVANTAGE \"A\" (HKD) INC","LU1430594728.SGD":"Eastspring Investments - Global Low Volatility Equity AS SGD","LU2471134523.USD":"INVESCO GLOBAL EQUITY INCOME ADVANTAGE \"A\" (USD) ACC","IE00B4R5TH58.HKD":"JANUS HENDERSON GLOBAL LIFE SCIENCES \"A2\" (HKD) ACC","BK4568":"美国抗疫概念","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","LU2129689514.USD":"FRANKLIN GLOBAL INCOME \"A\" (USD) INC","LU0345769128.USD":"NINETY ONE GSF GLOBAL EQUITY \"A\" (USD) ACC","JNJ":"强生","LU1261432733.SGD":"Fidelity World A-ACC-SGD","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","LU2471134796.USD":"INVESCO GLOBAL EQUITY INCOME ADVANTAGE \"A\" (USD) INC","SG9999001176.SGD":"UOB UNITED GLOBAL HEALTHCARE \"SGD\" (ACC)","LU1935042991.SGD":"MANULIFE GF GLOBAL MULTI-ASSET DIVERSIFIED INCOME  \"AA\" (SGDHDG) INC","LU1228905540.USD":"NINETY ONE GSF GLOBAL QUALITY DIVIDEND GROWTH \"A\" (USD) INC 2","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc"},"translate_title":"强生公司(JNJ)在一年飙升52%后，是时候重新评估它了吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"JNJ":1.5,"DCF":1},"content_text":"If you are wondering whether Johnson & Johnson stock still offers value after a strong run, the key is to look closely at what the current price implies versus what you are getting as a shareholder. The stock last closed at US$228.17, with returns of 10.0% year to date and 52.2% over the past year. The share price has slipped about 1.1% over the past week and gained 1.2% over the last 30 days, hinting that views on risk and reward are still shifting. Recent headlines around Johnson & Johnson have focused on ongoing product and legal developments, as well as its position in large scale healthcare markets. These factors continue to shape how investors think about its long term prospects and help explain why the stock’s longer term performance differs from the shorter term moves. Simply Wall St currently gives Johnson & Johnson a valuation score of 4 out of 6. The rest of this article will unpack what that means by comparing different valuation approaches, then conclude with a broader way to think about whether the current price truly reflects the full story.  Johnson & Johnson delivered 52.2% returns over the last year. See how this stacks up to the rest of the Pharmaceuticals industry. AdvertisementApproach 1: Johnson & Johnson Discounted Cash Flow (DCF) Analysis A Discounted Cash Flow model takes expected future cash flows, then discounts them back to today using a required rate of return. The aim is to estimate what those future cash flows are worth in today’s dollars. For Johnson & Johnson, the model used is a 2 stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $17.0b. Analyst inputs and extrapolated estimates point to projected free cash flow of $35.9b by 2030, with a series of annual projections in between that are all converted into today’s value using the chosen discount rate. Adding up those discounted cash flows gives an estimated intrinsic value of $374.05 per share. Versus the recent share price of $228.17, this implies the stock is trading at a 39.0% discount to the DCF estimate, which points to a meaningful gap between price and this particular cash flow based valuation. Result: UNDERVALUED Our Discounted Cash Flow (DCF) analysis suggests Johnson & Johnson is undervalued by 39.0%. Track this in your watchlist or portfolio, or discover 47 more high quality undervalued stocks. JNJ Discounted Cash Flow as at Jun 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Johnson & Johnson. Approach 2: Johnson & Johnson Price vs Earnings For profitable companies, the P/E ratio is a useful way to see how much you are paying for each dollar of current earnings. It ties the share price directly to the business’s ability to generate profit, which is usually more stable than revenue alone. What counts as a “normal” P/E depends on what investors expect for future growth and how risky those earnings appear. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually points to a lower multiple. Johnson & Johnson currently trades on a P/E of 26.11x. That is below the average of its directly compared peers at 27.10x, and above the wider Pharmaceuticals industry average of 15.29x. Simply Wall St’s Fair Ratio for Johnson & Johnson is 26.30x, which is a proprietary estimate of what the P/E might be given its earnings profile, industry, profit margins, market value and risk factors. The Fair Ratio can be more informative than a simple peer or industry comparison because it adjusts for company specific traits rather than assuming one size fits all. With the current 26.11x P/E sitting very close to the 26.30x Fair Ratio, the market price looks broadly aligned with this multiple based view. Result: ABOUT RIGHT NYSE:JNJ P/E Ratio as at Jun 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 21 top founder-led companies. Upgrade Your Decision Making: Choose your Johnson & Johnson Narrative Earlier we mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach a clear story to your numbers by linking your view of Johnson & Johnson’s business to a forecast for revenue, earnings and margins, and then to a Fair Value that you can compare to today’s price to help inform a decision on whether to buy, hold or sell. This all happens within an accessible tool on the Community page that updates when new information such as news or earnings is added. One investor might build a Narrative around Johnson & Johnson as a defensive compounder with a Fair Value of US$148.64, while another focuses on an AI powered pipeline or a more optimistic long term outlook with Fair Values around US$230.82 or US$265.00. A more cautious investor may anchor to a lower Fair Value such as US$181.77 or even US$146.57, each reflecting a different but transparent story behind the stock. For Johnson & Johnson however we'll make it really easy for you with previews of two leading Johnson & Johnson Narratives: 🐂 Johnson & Johnson Bull Case Fair Value: US$265.00 Implied undervaluation vs last close: 14.0% Revenue growth assumption: 7.10%  Centres on a broad set of US$1b plus pharmaceutical and MedTech platforms, with oncology, immunology, neuroscience and cardiovascular therapies feeding a large pipeline of potential future products. Builds in analyst expectations for revenue growth, a future profit margin of about 22.6% and earnings of US$26.2b by 2029, alongside a higher P/E multiple relative to today and to the wider US Pharmaceuticals industry. Highlights concentration in blockbuster assets, pricing and policy pressure, higher fixed costs, acquisition execution risk and legal exposure as key factors that could challenge the bullish case.  🐻 Johnson & Johnson Bear Case Fair Value: US$148.64 Implied overvaluation vs last close: 53.6% Revenue growth assumption: 4.73%  Frames Johnson & Johnson as a mature healthcare company with diversified revenue by geography and segment, and uses that profile to anchor more moderate growth and returns. Blends a 10 year DCF, a 10 year Dividend Discount Model and a historical dividend yield cross check to arrive at an overall fair value of US$148.64 per share. Argues that, at this level, the stock price sits above those blended value estimates, while still reflecting a company with long running dividends and what the author sees as durable earnings power.  Do you think there's more to the story for Johnson & Johnson? Head over to our Community to see what others are saying! NYSE:JNJ 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n        and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n        financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n        Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n        Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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