Johnson & Johnson
JNJ
$261.81
+0.99%
Johnson & Johnson is the world's largest and most diversified healthcare company, operating through two segments: Innovative Medicine (pharmaceuticals) and MedTech (medical devices). Following the 2023 divestiture of its consumer health business (Kenvue), the company now focuses on high-growth areas in immunology, oncology, and neurology, with a strong presence in surgical robotics and cardiovascular devices. The current investor narrative centers on the company's robust pipeline, recent FDA clearance for its surgical robot, and a proposed talc settlement that removes a major legal overhang, while the stock has rallied to near its 52-week high on strong earnings and raised guidance.…
JNJ
Johnson & Johnson
$261.81
Related headlines
Investment Opinion: Should I buy JNJ Today?
Rating: Buy. Johnson & Johnson offers a compelling risk-reward profile with strong fundamentals, a robust pipeline, and a favorable valuation on a PEG basis. The consensus analyst rating is 'Buy' with an average target of $271.73, implying 5.7% upside. The thesis is supported by 9.9% revenue growth, a 71.5% gross margin, and a PEG ratio of 0.21, which indicates undervaluation relative to growth. The company's free cash flow of $17.8B TTM provides financial flexibility, and the dividend yield of 2.46% adds income appeal.
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JNJ 12-Month Price Forecast
The AI assessment is bullish on JNJ, driven by strong fundamental performance and a favorable valuation on a growth-adjusted basis. The company's robust pipeline and legal resolution catalysts provide upside potential. However, the medium confidence reflects the modest analyst upside and potential execution risks. The stance would be upgraded if revenue growth accelerates above 10% and the stock breaks above its 52-week high. Conversely, it would be downgraded if pipeline setbacks occur or the forward PE exceeds 25x.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Johnson & Johnson's 12-month outlook, with a consensus price target around $272.50 and implied upside of +4.1% versus the current price.
Average Target
$272.50
0 analysts
Implied Upside
+4.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$190 - $305
Analyst target range
Johnson & Johnson is covered by 22 analysts, with a consensus recommendation of 'Buy' and a mean rating of 1.91 (where 1 is Strong Buy and 5 is Sell). The average price target is $271.73, implying an upside of 5.7% from the current price of $256.98. The distribution of ratings is bullish, with 10 analysts rating it Buy or Outperform, 4 at Hold, and none at Sell, indicating strong conviction in the company's future.
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Bulls vs Bears: JNJ Investment Factors
Johnson & Johnson presents a compelling bull case with strong revenue growth, high margins, and a favorable valuation on a PEG basis. The removal of the talc legal overhang and bullish analyst sentiment add to the positive outlook. However, the elevated forward PE and modest analyst upside suggest the stock may be fairly valued in the near term. The bear case is centered on valuation concerns and potential pipeline execution risks. Currently, the bull case has stronger evidence, given the company's fundamental strength and strategic catalysts. The key tension is whether the market will reward the company's growth with a higher multiple or if the premium valuation will cap returns. This will likely be resolved by the success of the surgical robot and pipeline progress.
Bullish
- Strong Revenue Growth: Q1 2026 revenue grew 9.9% YoY to $24.06B, driven by Innovative Medicine ($15.43B) and MedTech ($8.64B). This marks the fourth consecutive quarter of sequential revenue expansion, from $22.45B in Q2 2024 to $24.06B in Q1 2026.
- High Gross Margin: Gross margin stands at 71.5% in Q1 2026, reflecting pricing power and a favorable mix toward pharmaceuticals. This is slightly down from 72.8% in Q4 2025 but remains robust, supporting strong profitability.
- Undervalued on PEG: With a PEG ratio of 0.21, the stock is trading well below 1, indicating it is undervalued relative to its expected earnings growth. This suggests the market is not fully pricing in the company's growth prospects.
- Bullish Analyst Sentiment: 22 analysts rate JNJ a 'Buy' with a mean rating of 1.91, and the average price target of $271.73 implies 5.7% upside. No analysts rate it a Sell, indicating strong conviction in the company's future.
Bearish
- Elevated Valuation: The forward PE of 20.7x is higher than the trailing PE of 18.8x, suggesting the market expects earnings growth to moderate. This premium valuation could limit upside if growth disappoints.
- Recent Price Pullback: The stock has pulled back from its 52-week high of $274.90 to $256.98, a decline of about 6.5%. This suggests some profit-taking after a strong run, and the stock is now trading at 93.5% of its 52-week range.
- Modest Analyst Upside: The average analyst target of $271.73 implies only 5.7% upside from the current price, which is relatively modest. This suggests limited near-term appreciation potential.
- Dependence on Pipeline: The company's growth is heavily reliant on its drug pipeline and the success of new products like the surgical robot. Any pipeline setbacks could significantly impact growth expectations.
JNJ Technical Analysis
Johnson & Johnson is in a strong uptrend, with the stock up 50.6% over the past year, significantly outperforming the S&P 500's 21.5% gain. The current price of $256.98 sits at 93.5% of its 52-week range (between $169.92 low and $274.90 high), indicating the stock is trading near its highs, reflecting robust momentum and investor confidence. The 1-year relative strength of 29.2% versus the S&P 500 underscores this outperformance, though the recent pullback from the July high suggests some profit-taking after a sharp run-up.
Beta
0.23
0.23x market volatility
Max Drawdown
-11.0%
Largest decline past year
52-Week Range
$172-$275
Price range past year
Annual Return
+51.0%
Cumulative gain past year
| Period | JNJ Return | S&P 500 |
|---|---|---|
| 1m | +1.9% | +2.4% |
| 3m | +16.7% | +4.7% |
| 6m | +8.7% | +11.7% |
| 1y | +51.0% | +21.3% |
| ytd | +26.3% | +13.4% |
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JNJ Fundamental Analysis
Revenue growth has been solid, with Q1 2026 revenue of $24.06 billion, up 9.9% year-over-year, and the trailing twelve-month revenue trend shows consistent expansion from $22.45 billion in Q2 2024 to $24.06 billion in Q1 2026. The Innovative Medicine segment generated $15.43 billion in revenue, while MedTech contributed $8.64 billion, with the drug segment driving growth. Gross margin remains high at 71.5% in Q1 2026, reflecting the company's pricing power and mix shift toward pharmaceuticals, though it dipped slightly from 72.8% in the prior quarter.
Quarterly Revenue
$24.1B
2026-03
Revenue YoY Growth
+9.9%
YoY Comparison
Gross Margin
71.5%
Latest Quarter
Free Cash Flow
$17.8B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is JNJ Overvalued?
Given that Johnson & Johnson is highly profitable, the price-to-earnings (PE) ratio is the most appropriate valuation metric. The trailing PE is 18.8x, while the forward PE is 20.7x, indicating that the market expects earnings growth to moderate slightly, as the forward multiple is higher. This gap suggests that while the stock is not cheap, it is reasonably priced relative to its growth prospects, with a PEG ratio of 0.21, which is well below 1, implying the stock is undervalued relative to its expected earnings growth.
PE
18.8x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 17x~36x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
13.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Johnson & Johnson carries a moderate debt load with a debt-to-equity ratio of 0.59, which is manageable but could become a concern if interest rates rise. The company's free cash flow is strong at $17.8B TTM, providing ample coverage for debt and dividends. However, the payout ratio of 46.2% indicates a significant portion of earnings is returned to shareholders, leaving less for reinvestment. Revenue concentration in the Innovative Medicine segment (64% of total) exposes the company to drug patent expirations and regulatory changes. The gross margin, while high at 71.5%, has dipped slightly from the prior quarter, suggesting potential cost pressures.
