JOHNSON & JOHNSON (1JNJ.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1JNJ - US4781601046 - Common Stock
185.4 EUR
-1.58 (-0.85%)
Taking everything into account, 1JNJ scores 5 out of 10 in our fundamental rating. 1JNJ was compared to 55 industry peers in the Pharmaceuticals industry. 1JNJ scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, 1JNJ is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- In the past year 1JNJ was profitable.
- 1JNJ had a positive operating cash flow in the past year.
- Each year in the past 5 years 1JNJ has been profitable.
- Each year in the past 5 years 1JNJ had a positive operating cash flow.
1.2 Ratios
- 1JNJ has a better Return On Assets (13.03%) than 83.64% of its industry peers.
- Looking at the Return On Equity, with a value of 31.69%, 1JNJ is in the better half of the industry, outperforming 74.55% of the companies in the same industry.
- 1JNJ has a Return On Invested Capital of 14.68%. This is in the better half of the industry: 1JNJ outperforms 72.73% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital 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
- Looking at the Profit Margin, with a value of 27.26%, 1JNJ belongs to the top of the industry, outperforming 89.09% of the companies in the same industry.
- 1JNJ's Profit Margin has declined in the last couple of years.
- Looking at the Operating Margin, with a value of 27.00%, 1JNJ is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
- 1JNJ's Operating Margin has improved in the last couple of years.
- The Gross Margin of 1JNJ (68.14%) is comparable to the rest of the 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), 1JNJ is creating some value.
- Compared to 1 year ago, 1JNJ has about the same amount of shares outstanding.
- The number of shares outstanding for 1JNJ has been reduced compared to 5 years ago.
- Compared to 1 year ago, 1JNJ has a worse debt to assets ratio.
2.2 Solvency
- 1JNJ has an Altman-Z score of 4.96. This indicates that 1JNJ is financially healthy and has little risk of bankruptcy at the moment.
- 1JNJ's Altman-Z score of 4.96 is fine compared to the rest of the industry. 1JNJ outperforms 70.91% 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.
- 1JNJ's Debt to FCF ratio of 2.34 is amongst the best of the industry. 1JNJ outperforms 83.64% of its industry peers.
- A Debt/Equity ratio of 0.55 indicates that 1JNJ is somewhat dependend on debt financing.
- 1JNJ has a Debt to Equity ratio of 0.55. This is comparable to the rest of the industry: 1JNJ outperforms 56.36% of its industry peers.
- 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 | 4.96 |
ROIC/WACC1.51
WACC9.75%
2.3 Liquidity
- A Current Ratio of 1.07 indicates that 1JNJ should not have too much problems paying its short term obligations.
- 1JNJ's Current ratio of 1.07 is on the low side compared to the rest of the industry. 1JNJ is outperformed by 65.45% of its industry peers.
- A Quick Ratio of 0.80 indicates that 1JNJ may have some problems paying its short term obligations.
- With a Quick ratio value of 0.80, 1JNJ is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 1.37% over the past year.
- 1JNJ shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.85% yearly.
- The Revenue has been growing slightly by 5.08% in the past year.
- 1JNJ shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.60% yearly.
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.
- The Revenue is expected to grow by 5.37% on average over the next years.
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.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 21.31, the valuation of 1JNJ can be described as rather expensive.
- The rest of the industry has a similar Price/Earnings ratio as 1JNJ.
- Compared to an average S&P500 Price/Earnings ratio of 28.82, 1JNJ is valued a bit cheaper.
- 1JNJ is valuated rather expensively with a Price/Forward Earnings ratio of 19.13.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of 1JNJ is on the same level as its industry peers.
- When comparing the Price/Forward Earnings ratio of 1JNJ to the average of the S&P500 Index (25.95), we can say 1JNJ is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.31 | ||
| Fwd PE | 19.13 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.19 | ||
| EV/EBITDA | 16.91 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates 1JNJ does not grow enough to justify the current Price/Earnings ratio.
- The decent profitability rating of 1JNJ may justify a higher PE ratio.
PEG (NY)2.39
PEG (5Y)7.47
EPS Next 2Y7.57%
EPS Next 3Y7.79%
5. Dividend
5.1 Amount
- 1JNJ has a Yearly Dividend Yield of 2.37%.
- 1JNJ's Dividend Yield is a higher than the industry average which is at 1.62.
- 1JNJ's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
5.2 History
- On average, the dividend of 1JNJ grows each year by 9.24%, which is quite nice.
Dividend Growth(5Y)9.24%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 1JNJ pays out 48.70% of its income as dividend. 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 5 / 10 to 1JNJ.MI.
What is the valuation status of JOHNSON & JOHNSON (1JNJ.MI) stock?
ChartMill assigns a valuation rating of 3 / 10 to JOHNSON & JOHNSON (1JNJ.MI). This can be considered as Overvalued.
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 21.31 and the Price/Book (PB) ratio is 6.72.
What is the financial health of JOHNSON & JOHNSON (1JNJ.MI) stock?
The financial health rating of JOHNSON & JOHNSON (1JNJ.MI) is 5 / 10.