Johnson & Johnson (JNJ) Gains But Lags Market: What You Should Know

Johnson & Johnson (JNJ) closed at $163.84 in the latest trading session, marking a +1.15% move from the prior day. This move lagged the S&P 500's daily gain of 1.4%.

Coming into today, shares of the world's biggest maker of health care products had lost 5.25% in the past month. In that same time, the Medical sector gained 2.31%, while the S&P 500 gained 1.07%.

Wall Street will be looking for positivity from JNJ as it approaches its next earnings report date. This is expected to be July 21, 2021. In that report, analysts expect JNJ to post earnings of $2.28 per share. This would mark year-over-year growth of 36.53%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $22.27 billion, up 21.45% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.51 per share and revenue of $91.77 billion. These totals would mark changes of +18.43% and +11.13%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for JNJ. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.11% lower. JNJ currently has a Zacks Rank of #3 (Hold).

Digging into valuation, JNJ currently has a Forward P/E ratio of 17.04. Its industry sports an average Forward P/E of 14.74, so we one might conclude that JNJ is trading at a premium comparatively.

Investors should also note that JNJ has a PEG ratio of 2.6 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. JNJ's industry had an average PEG ratio of 2.11 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 190, putting it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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