News
Johnson & Johnson: 3 Key Takeaways for Long-Term Investors
MedTech growth stalled while pharma surged, leaving the company to bet on new product launches and a planned spin-off to restore momentum.
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Analysis
Johnson & Johnson has $24 billion in cash with consistent free cash flow generation exceeding $18 billion annually. As one of only two companies with a AAA credit rating (the other is Microsoft), J&J has one of the strongest balance sheets in corporate America.
Revenue grew 5.2% to $88 billion, driven by strong pharmaceutical sales and the MedTech division. The Innovative Medicine segment saw particular strength from oncology and immunology drugs. This is solid, dependable growth for a company this size.
At a P/E ratio of about 16, J&J is priced below the market average of 22. For a company with this level of stability, cash flow, and dividend history, this represents reasonable value. You are paying $16 for every $1 earned.
J&J shares have been on a quiet uptrend, gaining about 7% over three months. The stock trades above its moving averages. It does not have explosive moves like tech stocks, but it consistently grinds higher — exactly what income investors want.
Analysts are generally positive on J&J fundamentals but cautious about ongoing talc litigation settlements. The pharmaceutical pipeline is strong, but generic competition for some key drugs creates uncertainty. Most rate it a hold with a positive bias.
Financials
JNJ revenue from the latest annual FMP income statement.
JNJ diluted EPS from the latest annual FMP income statement.
JNJ operating cash flow from the latest annual FMP cash flow statement.
JNJ gross margin from FMP trailing-twelve-month ratios.