Johnson & Johnson (JNJ) Shares: Are They Risky Or Cheap?


Johnson & Johnson (NYSE:JNJ) finished Thursday with an addition of $0.9 to close at $177.56, an upside of 0.51 percent. An average of 3,586,840 shares of common stock have been traded in the last five days. There was a fall of -$0.12 in the past week, and it reached a new high 18 times over the past 12 months. The last 20 days have seen an average of 6,279,345 shares traded, while the 50-day average volume stands at 6,520,792.

JNJ stock has increased by 0.83% in the last month. The company shares reached their 1-month lowest point of $174.07 on 12/19/22. With the stock rallying to its 52-week high on 04/25/22, shares of the company touched a low of $155.72 and a high of $186.69 in 52 weeks. It has reached a new high 19 times so far this year and achieved 3.79% or $6.49 in price. In spite of this, the price is down -4.89% from the 52-week high.

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Insider Transactions

JNJ stock investors should be aware that Johnson & Johnson (JNJ) stock had its last reported insider trading activity 17 days ago on Dec 13. In this transaction, the insider spent $2,654,661. EVP, WW Chair, MedTech, McEvoy Ashley, disposed of 73,323 shares at a price of $175.47 on Nov 30. The insider now owns more than $12,865,801 worth of shares. Prior to that, EVP, WW Chair, Pharmaceuticals Taubert Jennifer L went on to Sale 76,923 shares at $176.78 each on Nov 22. An amount of $13,598,402 was transacted.

Valuation Metrics

Johnson & Johnson (JNJ) has a trailing price-to-earnings (P/E) ratio of 24.72. The stock’s beta is 0.56. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 4.82, the price-to-book (PB) ratio at 6.25, and the price-to-cash flow ratio at 74.45.

The company has a payout ratio of 60.10%. The company’s most recent quarterly dividend payment was $1.13 a share, without any change from last year. Its latest increase dividend $0.07 reported on Tuesday April 19 2022.

Financial Health

The quick ratio of Johnson & Johnson for the three months ended September 29 was 1.20, and the current ratio was 1.40, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.37 and a total debt to equity ratio of 0.43 for the quarter ending September 29. Its gross profit as reported stood at $63.92 billion compared to revenue of $93.78 billion.

Earnings Surprise

For the three-month period that ended September 29, Johnson & Johnson had $22.72 billion in cash and short-term investments compared to $27.6 billion in total debt. In the quarter under review, the net income was down than the previous quarter. The company posted a net income of $4.46 billion in the quarter, while revenues of $4.81 billion were grew 17.74%. The analyst consensus anticipated Johnson & Johnson’s latest quarter earnings to come in at $2.47 per share, but it turned out to be $2.55, a 3.20% surprise. For the quarter, EBITDA amounted to $7.71 billion. Shareholders own equity worth $2.61 billion.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Johnson & Johnson (JNJ) price momentum. RSI 9-day as of the close on 29 December was 53.94%, suggesting the stock is Neutral, with historical volatility in this time frame at 11.37%.

As of today, JNJ’s price is $177.23 -0.07% or -$0.12 from its 5-day moving average. JNJ is currently trading -0.25% lower than its 20-day SMA and +4.32% higher than its 100-day SMA. However, the stock’s current price level is +6.96% above the SMA50 and +0.81% above the SMA200.

The stochastic %K and %D were 45.15% and 46.20%, respectively, and the average true range (ATR) was 2.05. With the 14-day stochastic at 50.08% and the average true range at 2.17, the RSI (14) stands at 54.51%. The stock has reached 0.48 on the 9-day MACD Oscillator while the 14-day reading was at 0.02.

Analyst Ratings

Credit Suisse launched coverage on Johnson & Johnson (NYSE: JNJ) in its analyst report released on November 18, 2022. The firm assigned the stock a Neutral rating. The consensus rating for Johnson & Johnson (JNJ) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell JNJ, while 13 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 2 analysts, while 6 others rate it as a “buy”.

What is JNJ’s price target for the next 12 months?

Analysts predict a range of price targets between $160.00 and $215.00, with a median target of $180.50. Taking a look at these predictions, the average price target given by analysts for Johnson & Johnson (JNJ) stock is $185.35.


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