NYSE:JNJ, an undervalued stock with good fundamentals.

Last update: Jun 18, 2024

Discover JOHNSON & JOHNSON (NYSE:JNJ), an undervalued stock highlighted by our stock screener. NYSE:JNJ showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

Valuation Insights: NYSE:JNJ

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:JNJ has achieved a 7 out of 10:

Based on the Price/Earnings ratio, JNJ is valued cheaply inside the industry as 88.08% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.66. JNJ is valued rather cheaply when compared to this.
JNJ's Price/Forward Earnings ratio is rather cheap when compared to the industry. JNJ is cheaper than 82.90% of the companies in the same industry.
JNJ's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.15.
Based on the Enterprise Value to EBITDA ratio, JNJ is valued cheaper than 84.97% of the companies in the same industry.
84.97% of the companies in the same industry are more expensive than JNJ, based on the Price/Free Cash Flow ratio.
JNJ has an outstanding profitability rating, which may justify a higher PE ratio.

Profitability Examination for NYSE:JNJ

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:JNJ scores a 8 out of 10:

With an excellent Return On Assets value of 22.37%, JNJ belongs to the best of the industry, outperforming 97.93% of the companies in the same industry.
With an excellent Return On Equity value of 54.95%, JNJ belongs to the best of the industry, outperforming 97.41% of the companies in the same industry.
JNJ has a better Return On Invested Capital (16.20%) than 92.75% of its industry peers.
The last Return On Invested Capital (16.20%) for JNJ is above the 3 year average (14.68%), which is a sign of increasing profitability.
With an excellent Profit Margin value of 44.92%, JNJ belongs to the best of the industry, outperforming 96.89% of the companies in the same industry.
JNJ's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 28.32%, JNJ belongs to the top of the industry, outperforming 93.78% of the companies in the same industry.
JNJ's Operating Margin has improved in the last couple of years.
JNJ's Gross Margin of 69.57% is fine compared to the rest of the industry. JNJ outperforms 73.06% of its industry peers.

Unpacking NYSE:JNJ's Health Rating

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:JNJ has earned a 8 out of 10:

JNJ has an Altman-Z score of 4.34. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
JNJ has a Altman-Z score of 4.34. This is amongst the best in the industry. JNJ outperforms 80.83% of its industry peers.
The Debt to FCF ratio of JNJ is 1.80, which is an excellent value as it means it would take JNJ, only 1.80 years of fcf income to pay off all of its debts.
JNJ has a Debt to FCF ratio of 1.80. This is amongst the best in the industry. JNJ outperforms 93.78% of its industry peers.
A Debt/Equity ratio of 0.45 indicates that JNJ is not too dependend on debt financing.
Even though the debt/equity ratio score it not favorable for JNJ, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
The current and quick ratio evaluation for JNJ is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Understanding NYSE:JNJ's Growth Score

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:JNJ has received a 4 out of 10:

Looking at the last year, JNJ shows a quite strong growth in Revenue. The Revenue has grown by 10.57% in the last year.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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Check the latest full fundamental report of JNJ for a complete fundamental analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.