Johnson & Johnson (JNJ) Dips More Than Broader Markets: What You Should Know

Johnson & Johnson (JNJ) closed the most recent trading day at $137.36, moving -1.72% from the previous trading session. This change lagged the S&P 500's daily loss of 0.16%. Meanwhile, the Dow lost 0.12%, and the Nasdaq, a tech-heavy index, lost 0.33%.

Prior to today's trading, shares of the world's biggest maker of health care products had gained 2.43% over the past month. This has outpaced the Medical sector's loss of 8.16% and the S&P 500's loss of 10.5% in that time.

Investors will be hoping for strength from JNJ as it approaches its next earnings release, which is expected to be April 14, 2020. On that day, JNJ is projected to report earnings of $2.11 per share, which would represent year-over-year growth of 0.48%. Our most recent consensus estimate is calling for quarterly revenue of $19.66 billion, down 1.8% from the year-ago period.

JNJ's full-year Zacks Consensus Estimates are calling for earnings of $8.81 per share and revenue of $83.05 billion. These results would represent year-over-year changes of +1.5% and +1.2%, respectively.

Any recent changes to analyst estimates for JNJ should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.46% lower. JNJ currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, JNJ is holding a Forward P/E ratio of 15.87. Its industry sports an average Forward P/E of 14.09, so we one might conclude that JNJ is trading at a premium comparatively.

We can also see that JNJ currently has a PEG ratio of 2.52. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Large Cap Pharmaceuticals was holding an average PEG ratio of 1.83 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 33, which puts it in the top 13% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow JNJ in the coming trading sessions, be sure to utilize Zacks.com.

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