Johnson & Johnson
JNJ
$267.20
+0.33%
Johnson & Johnson is the world's largest and most diversified healthcare company, operating through two core divisions — Innovative Medicine (pharmaceuticals focused on immunology, oncology, and neurology) and MedTech (surgical devices, orthopedics, and vision care) — following the 2023 spin-off of its consumer health unit, Kenvue. As a $504 billion market-cap healthcare giant with roughly 140,800 employees and over half its revenue generated in the United States, JNJ occupies a uniquely defensive position as both a pharmaceutical powerhouse and a medical-device platform, a combination few competitors can match. The current investor narrative centers on three catalysts: FDA clearance for its Ottava surgical robot, a proposed talc litigation settlement that would remove a long-standing legal overhang, and a 64th consecutive annual dividend increase that reinforces its status as a Dividend King. Management has also signaled a target of $100 billion in revenue, with the drug pipeline and MedTech innovation driving long-term growth, though the stock's strong 2026 rally has prompted debate over whether the easy gains are already priced in.…
JNJ
Johnson & Johnson
$267.20
Related headlines
JNJ 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Johnson & Johnson's 12-month outlook, with a consensus price target around $277.91 and implied upside of +4.0% versus the current price.
Average Target
$277.91
0 analysts
Implied Upside
+4.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$190 - $320
Analyst target range
JNJ is covered by 22 analysts with a consensus recommendation of "buy" (mean rating of 1.91 on a 1–5 scale where 1 is Strong Buy), reflecting broadly bullish sentiment. The average price target of $277.91 implies approximately +4.6% upside from the current price of $265.58, a modest but positive expected return. The consensus leans moderately bullish, though the limited upside to the average target suggests analysts see the stock as fairly valued after its strong 2026 run, with the bulk of the easy gains already captured.
The target range is wide, spanning from a low of $190.00 to a high of $320.00 — a spread of $130, or roughly 49% of the current price — which signals meaningful disagreement about JNJ's trajectory. The high target of $320 assumes successful execution on the surgical robot launch, resolution of talc litigation, and accelerating pipeline contributions toward the $100 billion revenue target, while the low target of $190 prices in margin compression, competitive erosion in immunology, or adverse litigation outcomes. Recent institutional ratings show a predominantly constructive tone: Leerink Partners upgraded to Outperform from Market Perform on May 13, 2026, while RBC Capital, TD Cowen, Morgan Stanley, Citigroup, and Guggenheim all maintained Buy or Outperform ratings through mid-2026; only B of A Securities, Stifel, and Barclays remain Neutral or Hold. The absence of any Sell ratings and the recent upgrade activity suggest the analyst community sees limited downside risk, though the tight upside to the average target implies the stock may need a new catalyst — such as the talc settlement finalization or Ottava robot commercialization — to break through the $281 resistance level.
Drowning in data?
Find the real signal!
Bulls vs Bears: JNJ Investment Factors
The bull case for JNJ rests on its defensive growth, dividend reliability, and pipeline catalysts, supported by strong profitability and a low beta. However, the bear case highlights limited analyst upside, elevated valuation multiples, and potential legal and competitive risks. Currently, the bull evidence appears stronger due to the company's consistent execution and favorable analyst sentiment, but the most critical tension is whether the stock can break through the $281 resistance level without a new catalyst. If the talc settlement finalizes or the Ottava robot gains traction, the stock could re-rate; otherwise, it may consolidate.
Bullish
- Defensive Growth Leader: JNJ has returned 48.78% over the past year, significantly outperforming the S&P 500's 16.22% gain, with a relative strength of +32.56%. This demonstrates the company's ability to deliver market-beating returns while maintaining a low beta of 0.235, offering growth with downside protection.
- Dividend King with 64-Year Streak: JNJ has increased its dividend for 64 consecutive years, with a current yield of 2.46% and a sustainable payout ratio of 46.19%. The $12.52 billion annual dividend is well-covered by $17.80 billion in trailing free cash flow, ensuring continued income growth.
- Pipeline Catalysts and Innovation: FDA clearance for the Ottava surgical robot and a proposed talc litigation settlement remove major overhangs and open new growth avenues. The company targets $100 billion in revenue, driven by its Innovative Medicine segment, which grew 9.91% YoY in Q1 2026 to $15.43 billion.
- Strong Profitability and Balance Sheet: JNJ boasts a 28.46% net margin, 32.87% ROE, and a conservative debt-to-equity ratio of 0.588. These metrics reflect exceptional operational efficiency and financial stability, supporting continued investment in R&D and shareholder returns.
Bearish
- Limited Upside to Analyst Targets: The average analyst target of $277.91 offers only 4.6% upside from the current price of $265.58, indicating the stock may be fairly valued after its strong run. The high target of $320 is 20.5% above current levels but requires flawless execution on multiple catalysts.
- Elevated Valuation vs. History: The trailing PE of 18.82x and forward PE of 21.33x are above the stock's historical low of 9.07x, and the forward PE exceeds the trailing, suggesting earnings compression. The PS ratio of 5.35x, while below historical highs, may still be rich given mid-single-digit revenue growth.
- Tight Liquidity and Working Capital Drag: The current ratio of 1.03 indicates limited short-term liquidity buffer, and Q1 2026 free cash flow was just $1.47 billion due to a $5.23 billion working capital drag. This could constrain flexibility if operational challenges arise.
- Legal and Competitive Overhangs: The talc litigation remains unresolved, and any adverse outcome could result in significant financial penalties. Additionally, competition in immunology and oncology is intensifying, with peers like Eli Lilly and Biogen making strategic moves.
JNJ Technical Analysis
JNJ is in a sustained, powerful uptrend, with the stock up 48.78% over the past year and 28.08% year-to-date, dramatically outperforming the S&P 500's 16.22% and 12.08% respective gains. At a current price of $265.58, the stock sits at approximately 85.6% of its 52-week range (low of $173.33, high of $281.07), positioning it in the upper quartile of its annual band — a zone that historically signals strong momentum but also elevated vulnerability to profit-taking. The 1-year relative strength of +32.56% versus SPY confirms JNJ has been a genuine market leader rather than merely riding broad beta, though the 6-month relative strength of -5.44% hints that the pace of outperformance has moderated in recent months.
Short-term momentum remains constructive but is decelerating: the 1-month change of +1.81% and 3-month change of +10.26% are both positive, yet the 1-month figure is notably weaker than the 3-month, suggesting the rally is losing some steam near the highs. The most recent week shows a pullback from the September 3 peak of $278.43 to $265.58, a decline of roughly 4.6%, which could represent either a healthy consolidation or the early stages of mean reversion. Notably, JNJ's 1-month relative strength of +2.87% versus SPY's -1.06% indicates the stock is still outperforming a weakening broad market, a defensive characteristic consistent with its low beta of 0.235 — meaning JNJ moves only about 23.5% as much as the market, making it an exceptionally low-volatility holding.
Key technical levels are well-defined: the 52-week high of $281.07 serves as the primary resistance ceiling, and a decisive breakout above that level would signal renewed institutional accumulation and potentially open a path toward the analyst high target of $320. On the downside, the 52-week low of $173.33 represents the ultimate support floor, though intermediate support likely exists in the $250–$255 zone where the stock consolidated in late July and early August. The maximum drawdown of -10.96% over the period reflects remarkably contained volatility, consistent with the 0.235 beta, which implies that position sizing can be more aggressive than for higher-beta healthcare peers without proportionally increasing portfolio risk.
Beta
0.23
0.23x market volatility
Max Drawdown
-11.0%
Largest decline past year
52-Week Range
$173-$281
Price range past year
Annual Return
+50.6%
Cumulative gain past year
| Period | JNJ Return | S&P 500 |
|---|---|---|
| 1m | +2.6% | -2.4% |
| 3m | +14.1% | +2.2% |
| 6m | +12.5% | +14.8% |
| 1y | +50.6% | +14.6% |
| ytd | +28.9% | +11.1% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
JNJ Fundamental Analysis
JNJ's revenue trajectory is healthy and re-accelerating, with Q1 2026 revenue of $24.06 billion representing 9.91% year-over-year growth — a meaningful acceleration from the roughly 6.5% YoY growth implied by Q1 2025's $21.89 billion base. The sequential trend across recent quarters ($23.74B in Q2 2025, $23.99B in Q3 2025, $24.56B in Q4 2025, $24.06B in Q1 2026) shows a business that has stabilized around the $24 billion quarterly run-rate with a modest upward bias. Segment data reveals that Innovative Medicine generated $15.43 billion (roughly 64% of revenue) versus MedTech's $8.64 billion (36%), meaning the pharmaceutical division remains the primary growth engine and the key swing factor for the investment case, particularly given its focus on immunology, oncology, and neurology.
Profitability is robust and improving: Q1 2026 net income was $5.24 billion on a 21.76% net margin, with gross margin at 71.49% and operating margin at 26.58%. Comparing this to Q1 2025's exceptional 50.24% net margin — which was inflated by a $7.33 billion one-time other-income gain — the underlying operating profitability is actually stable to slightly improving, as the 26.58% operating margin in Q1 2026 exceeds the 28.77% reported in Q1 2025 only modestly but on a cleaner basis. The gross margin of 71.49% is consistent with big-pharma norms and reflects strong pricing power in innovative medicine, while the 34.35% EBITDA margin demonstrates the cash-generative nature of the combined business.
Balance sheet health is solid but not pristine: the debt-to-equity ratio of 0.588 is conservative for a company of this scale, and ROE of 32.87% is exceptional, reflecting both strong earnings and the capital-light nature of pharmaceuticals relative to the asset base. However, the current ratio of 1.03 is tight, indicating limited short-term liquidity buffer, and trailing free cash flow of $17.80 billion comfortably covers the $12.52 billion in annual dividends paid (payout ratio of 46.19%), leaving room for continued dividend growth and bolt-on M&A. The Q1 2026 free cash flow of just $1.47 billion was depressed by a $5.23 billion working capital drag and $7.21 billion in debt repayment, but the trailing figure confirms the company generates ample internal cash to fund operations without relying on external financing.
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
Open an Account, get $2 TSLA now!
Valuation Analysis: Is JNJ Overvalued?
Because JNJ is solidly profitable with trailing net income of approximately $5.24 billion in the most recent quarter and positive EPS of $0.053 (reflecting a quarterly figure that annualizes to roughly $18+ on an adjusted basis), the PE ratio is the appropriate primary valuation metric. The trailing PE of 18.82x compares to a forward PE of 21.33x — an unusual inversion where the forward multiple exceeds the trailing, implying the market expects near-term earnings compression or that trailing earnings were boosted by one-time items. This gap suggests the market is pricing in modest headwinds or normalization rather than aggressive growth acceleration, which is consistent with a mature healthcare compounder.
Relative to the broader Drug Manufacturers - General industry, JNJ's trailing PE of 18.82x and forward PE of 21.33x sit at a modest premium to the sector's typical mid-to-high teens multiple, but the premium is justified by JNJ's unmatched scale, diversified revenue base, and 64-year dividend growth streak. The price-to-sales ratio of 5.35x and EV/EBITDA of 12.97x are reasonable for a company with 28.46% net margins and 72.78% gross margins, though the price-to-book of 6.18x reflects the asset-light nature of the pharmaceutical business. The PEG ratio of 0.212 appears exceptionally low, suggesting the stock is undervalued relative to its growth rate, though this metric may be distorted by the low absolute EPS figure used in the calculation.
Historically, JNJ's PE ratio has ranged from a low of 9.07x (Q1 2025, distorted by one-time gains) to a high of 36.17x (Q3 2024), with the current 18.82x sitting near the lower-middle of that band. The PS ratio of 5.35x is near the low end of its historical range of roughly 15x–25x, though this comparison is complicated by the Kenvue spin-off which changed the revenue base. The dividend yield of 2.46% is above the stock's recent historical average of roughly 0.6–0.8%, reflecting the substantial price appreciation that has outpaced dividend growth, and the payout ratio of 46.19% remains comfortably sustainable.
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 and operational risks for JNJ include a tight current ratio of 1.03, which limits short-term liquidity, and a Q1 2026 free cash flow of only $1.47 billion due to a $5.23 billion working capital drag. The company's debt-to-equity of 0.588 is manageable, but interest expenses of $272 million in Q1 2026 could rise if rates increase. Revenue concentration in Innovative Medicine (64% of Q1 2026 revenue) exposes JNJ to patent cliffs and pricing pressures in immunology and oncology, where competition is fierce. Additionally, the payout ratio of 46.19% leaves room for dividend growth, but any earnings volatility could threaten the 64-year streak.
Market and competitive risks include valuation compression if JNJ's PE of 18.82x contracts toward its historical low of 9.07x, which would imply a significant price decline. The low beta of 0.235 reduces market correlation but also means JNJ may lag in strong bull markets. Regulatory headwinds, such as drug pricing reforms or adverse litigation outcomes, could pressure margins. Recent news highlights the talc settlement as a major overhang; failure to resolve it could trigger a sell-off. Competition from Eli Lilly and Biogen in immunology and neurology could erode JNJ's market share.
In a worst-case scenario, an adverse talc ruling combined with pipeline setbacks could drive the stock toward its 52-week low of $173.33, representing a 34.7% decline from the current price of $265.58. The analyst low target of $190 implies a 28.4% downside. A market rotation away from defensive healthcare stocks, coupled with earnings misses, could accelerate the decline. Investors could lose up to 35% in this scenario, underscoring the importance of monitoring legal and competitive developments.