JOHNSON & JOHNSON (1JNJ.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1JNJ - US4781601046 - Common Stock
185.4 EUR
+12.64 (+7.32%)
Taking everything into account, 1JNJ scores 6 out of 10 in our fundamental rating. 1JNJ was compared to 55 industry peers in the Pharmaceuticals industry. While 1JNJ belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. 1JNJ has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- 1JNJ had positive earnings in the past year.
- 1JNJ had a positive operating cash flow in the past year.
- Each year in the past 5 years 1JNJ has been profitable.
- 1JNJ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- 1JNJ has a better Return On Assets (13.03%) than 81.13% of its industry peers.
- 1JNJ's Return On Equity of 31.69% is fine compared to the rest of the industry. 1JNJ outperforms 75.47% of its industry peers.
- 1JNJ has a Return On Invested Capital of 14.68%. This is in the better half of the industry: 1JNJ outperforms 73.58% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for 1JNJ is in line with the industry average of 14.00%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.03% | ||
| ROE | 31.69% | ||
| ROIC | 14.68% |
ROA(3y)12.79%
ROA(5y)11.65%
ROE(3y)31.38%
ROE(5y)29.12%
ROIC(3y)15.41%
ROIC(5y)14.48%
1.3 Margins
- 1JNJ has a better Profit Margin (27.26%) than 86.79% of its industry peers.
- In the last couple of years the Profit Margin of 1JNJ has declined.
- 1JNJ has a better Operating Margin (27.00%) than 73.58% of its industry peers.
- In the last couple of years the Operating Margin of 1JNJ has grown nicely.
- Looking at the Gross Margin, with a value of 68.14%, 1JNJ is in line with its industry, outperforming 47.17% of the companies in the same industry.
- 1JNJ's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27% | ||
| PM (TTM) | 27.26% | ||
| GM | 68.14% |
OM growth 3Y0.33%
OM growth 5Y3.14%
PM growth 3Y-15.79%
PM growth 5Y-2.98%
GM growth 3Y-0.56%
GM growth 5Y0.76%
2. Health
2.1 Basic Checks
- 1JNJ has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, 1JNJ has about the same amount of shares outstanding.
- 1JNJ has less shares outstanding than it did 5 years ago.
- 1JNJ has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 4.75 indicates that 1JNJ is not in any danger for bankruptcy at the moment.
- 1JNJ has a better Altman-Z score (4.75) than 67.92% of its industry peers.
- The Debt to FCF ratio of 1JNJ is 2.34, which is a good value as it means it would take 1JNJ, 2.34 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of 1JNJ (2.34) is better than 83.02% of its industry peers.
- A Debt/Equity ratio of 0.55 indicates that 1JNJ is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.55, 1JNJ perfoms like the industry average, outperforming 56.60% of the companies in the same industry.
- Although 1JNJ does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 4.75 |
ROIC/WACC1.5
WACC9.81%
2.3 Liquidity
- A Current Ratio of 1.07 indicates that 1JNJ should not have too much problems paying its short term obligations.
- 1JNJ has a worse Current ratio (1.07) than 64.15% of its industry peers.
- A Quick Ratio of 0.80 indicates that 1JNJ may have some problems paying its short term obligations.
- 1JNJ has a Quick ratio of 0.80. This is comparable to the rest of the industry: 1JNJ outperforms 41.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
- 1JNJ shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.37%.
- The Earnings Per Share has been growing slightly by 2.85% on average over the past years.
- 1JNJ shows a small growth in Revenue. In the last year, the Revenue has grown by 5.08%.
- The Revenue has been growing slightly by 1.60% on average over the past years.
EPS 1Y (TTM)1.37%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%15.7%
Revenue 1Y (TTM)5.08%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%6.77%
3.2 Future
- The Earnings Per Share is expected to grow by 7.93% on average over the next years.
- Based on estimates for the next years, 1JNJ will show a small growth in Revenue. The Revenue will grow by 5.37% on average per year.
EPS Next Y8.9%
EPS Next 2Y7.57%
EPS Next 3Y7.79%
EPS Next 5Y7.93%
Revenue Next Year5.63%
Revenue Next 2Y5.56%
Revenue Next 3Y5.35%
Revenue Next 5Y5.37%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- 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.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 20.74, the valuation of 1JNJ can be described as rather expensive.
- 1JNJ's Price/Earnings ratio is in line with the industry average.
- When comparing the Price/Earnings ratio of 1JNJ to the average of the S&P500 Index (27.21), we can say 1JNJ is valued slightly cheaper.
- The Price/Forward Earnings ratio is 18.63, which indicates a rather expensive current valuation of 1JNJ.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of 1JNJ is on the same level as its industry peers.
- 1JNJ is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.74 | ||
| Fwd PE | 18.63 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of 1JNJ is on the same level as its industry peers.
- 1JNJ's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. 1JNJ is cheaper than 60.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.48 | ||
| EV/EBITDA | 15.67 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of 1JNJ may justify a higher PE ratio.
PEG (NY)2.33
PEG (5Y)7.27
EPS Next 2Y7.57%
EPS Next 3Y7.79%
5. Dividend
5.1 Amount
- 1JNJ has a Yearly Dividend Yield of 2.37%.
- Compared to an average industry Dividend Yield of 1.62, 1JNJ pays a bit more dividend than its industry peers.
- 1JNJ's Dividend Yield is a higher than the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
5.2 History
- The dividend of 1JNJ is nicely growing with an annual growth rate of 9.24%!
Dividend Growth(5Y)9.24%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 48.70% of the earnings are spent on dividend by 1JNJ. This is a bit on the high side, but may be sustainable.
- 1JNJ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP48.7%
EPS Next 2Y7.57%
EPS Next 3Y7.79%
JOHNSON & JOHNSON / 1JNJ.MI FAQ
What is the fundamental rating for 1JNJ stock?
ChartMill assigns a fundamental rating of 6 / 10 to 1JNJ.MI.
What is the valuation status of JOHNSON & JOHNSON (1JNJ.MI) stock?
ChartMill assigns a valuation rating of 4 / 10 to JOHNSON & JOHNSON (1JNJ.MI). This can be considered as Fairly Valued.
Can you provide the profitability details for JOHNSON & JOHNSON?
JOHNSON & JOHNSON (1JNJ.MI) has a profitability rating of 7 / 10.
What is the valuation of JOHNSON & JOHNSON based on its PE and PB ratios?
The Price/Earnings (PE) ratio for JOHNSON & JOHNSON (1JNJ.MI) is 20.74 and the Price/Book (PB) ratio is 6.55.
What is the financial health of JOHNSON & JOHNSON (1JNJ.MI) stock?
The financial health rating of JOHNSON & JOHNSON (1JNJ.MI) is 6 / 10.