Opinions
Paul Harris, CFA
Johnson & Johnson
JNJ-N
PAST TOP PICK
Sep 03, 2024
Stock price when the opinion was issued
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The consumer product monster has increased debt lately, but analysts feel comfortable with the low debt to earnings ratio. This is allowing the company to continue growing cash reserves. It trades at 24x earnings and supports a 20% ROE. We recommend setting a stop-loss at $133 looking to achieve $174 -- upside potential of 19%. Yield 3.3%
(Analysts’ price target is $174.28)Johnson & Johnson is a holding company, which engages in the research and development, manufacture and sale of products in the health care field. It operates through the following segments: Consumer Health, Pharmaceutical, and Medical Devices. The Consumer Health segment includes products used in the baby care, oral care, beauty, over-the-counter pharmaceutical, women's health, and wound care markets. The Pharmaceutical segment focuses on therapeutic areas, such as immunology, infectious diseases, neuroscience, oncology, pulmonary hypertension, and cardiovascular & metabolic diseases. Social media mentions are up 250% in the past 24h.
Is a hodge-podge of consumer products, some medical business and an also-ran in businesses like hips and knees. This has always traded at a premium for being a well-run consumer package company that money managers can't get fired for owning. It's so big that it needs to be broken up.
They spun off personal products, so JNJ is more a medical device company. They have huge cash from that spin-off, which could allow buying a medical device or biotech company. The talcum powder lawsuit is settling, too. They've raised their dividend for 54 years.