Founded in 1886, New Jersey-based Johnson & Johnson (JNJ), with a market cap of $364.1 billion, is one of the world's most recognizable multinational corporations in the healthcare industry. It excels through its diversified business model and significant R&D investments across pharmaceuticals, medical devices, and consumer products, significantly impacting healthcare innovation and consumer well-being.
The mega-cap pharma stock has significantly underperformed the broader market over the past 52 weeks. JNJ has declined 4.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 26.6%. In 2024, shares of JNJ are down 3.5%, compared to SPX's 11.3% gains on a YTD basis.
Zooming in further, JNJ lagged behind the US Pharmaceuticals Ishares ETF's (IHE) 12.3% gains over the past 52 weeks.
JNJ's underperformance compared to the broader indexes can be due to ongoing talc and opioid lawsuits, supply constraints of Carvykti, weaker-than-expected medical device sales, the loss of Stelara exclusivity, and financial impacts from its subsidiary's potential bankruptcy. Moreover, JNJ's stock dipped 2.1% on April 16 following mixed Q1 earnings. Plus, the healthcare giant is selling its Kenvue stake to focus on core businesses amid stock declines and legal issues over talcum powder.
For the current fiscal year, ending in December, analysts expect JNJ's EPS to grow by 7.3% to $10.64. The company's earnings surprise history is robust. It beat the consensus estimate in all of the last four quarters.
Among the 19 analysts covering JNJ stock, the consensus rating is "Moderate Buy." That's based on seven "Strong Buy" ratings, two "Moderate Buys," and 10 "Holds."
This configuration is slightly less bullish than two months before, with eight analysts suggesting a "Strong Buy."
On May 19, Citigroup (C) analyst Joanne Wuensch maintained a "Buy" rating for JNJ, with a price target of $185, implying an upside potential of 22.3% from current levels.
The mean price target of $173.65 represents a premium of 14.8% to JNJ's current levels. The Street-high price target of $215, assigned by Cantor Fitzgerald earlier this month, implies a potential upside of 42.1% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
