Johnson & Johnson (JNJ) closed at $154.42 in the latest trading session, marking a -0.63% move from the prior day.
Why would you consider buying Johnson & Johnson stock (NYSE:JNJ) at 17 times its trailing earnings when Merck stock (NYSE: MRK) trades at around 13 times? After all, Merck has nearly 10% average revenue growth compared to J&J's modest 4%, and Merck's operating cash flow margins are a healthier 33% versus J&J's 28%.
Johnson & Johnson remains undervalued with strong profitability and reasonable valuation metrics, but growth prospects are modest and uncertain. Profitability is robust, with an A+ grade, high margins, and nearly 30% return on equity, supporting the company's structural quality. Key risks include regulatory challenges, legal liabilities from talc lawsuits, and potential price controls on major drugs like Darzalex Faspro.
It may be too soon to rotate back into the risk trade as market volatility calms.
Despite legal headwinds and a declining share price, JNJ remains a financial powerhouse with strong profitability, a robust dividend, and aggressive buybacks. JNJ's 62-year streak of dividend growth, 3.4% yield, and disciplined capital allocation make it highly attractive for long-term, income-focused investors. The company is undervalued, trading at less than 15x 2025 EPS, with double-digit EPS growth projected and a pipeline of high-growth assets fueling future expansion.
In the closing of the recent trading day, Johnson & Johnson (JNJ) stood at $152.51, denoting a -0.44% change from the preceding trading day.
J&J's JNJ stock has declined 6.4% in the past three months. J&J faces several challenges, including slowing sales in the MedTech segment, loss of exclusivity of its blockbuster drug, Stelara, and uncertainty around the talc lawsuits, among others.
Johnson & Johnson (JNJ) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
Johnson & Johnson (NYSE:JNJ ) RBC Capital Markets Global Healthcare Conference May 20, 2025 1:35 PM ET Corporate Participants Joe Wolk - EVP, Chief Financial Officer Conference Call Participants Shagun Singh - RBC Capital Markets Shagun Singh Hello everyone, I am Shagun Singh, Senior Research Analyst at RBC, and I'm very happy to host the next session with Johnson & Johnson. Joining us from the company is Joe Wolk, Chief Financial Officer of the company.
Wondering how to pick strong, market-beating stocks for your investment portfolio? Look no further than the Zacks Style Scores.
Companies with strong products, good management, solid earnings and growth trends, and a history of annual dividend increases are often popular buy and hold stocks to take advantage of dividend compounding.
Johnson & Johnson (JNJ) reported earnings 30 days ago. What's next for the stock?