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Johnson & Johnson (JNJ) Stock: How Does it Score on Fundamental Metrics?

Friday, December 08, 2023 03:18 PM | InvestorsObserver Analysts

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Johnson & Johnson (JNJ) Stock: How Does it Score on Fundamental Metrics?

Johnson & Johnson (JNJ) receives a weak valuation ranking of 25 from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. JNJ has a better value than 25% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.

Valuation Rank - 25
JNJ gets a 25 Valuation Rank today. Find out what this means to you and get the rest of the rankings on JNJ!

Metrics Analysis

JNJ has a trailing twelve month Price to Earnings (PE) ratio of 10.89. The historical average of roughly 15 shows a average value for JNJ stock as investors are paying fair share prices relative to the company's earnings. JNJ's average trailing PE ratio shows that the firm has been trading around its fair market value recently. Its trailing 12-month earnings per share (EPS) of 13.47 justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings.
JNJ's 12-month-forward PE to Growth (PEG) ratio of 3.23 is considered a poor value as the market is overvaluing JNJ in relation to the company's projected earnings growth due. JNJ's PEG comes from its forward price to earnings ratio being divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and share price. Due to their incorporation of more fundamentals of a company's overall health and focusing on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.


All together these valuation metrics paint a pretty poor picture for JNJ at its current price due to a overvalued PEG ratio due to strong growth. The PE and PEG for JNJ are worse than the average of the market resulting in a valuation score of 25. Click Here to get the full Report on Johnson & Johnson (JNJ) stock.

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