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Assessing Johnson & Johnson’s 1Q17 Performance

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A look at Johnson & Johnson

Johnson & Johnson (JNJ) is one of the largest pharmaceutical and healthcare companies. It supplies its products to over 200 countries worldwide.

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Stock performance

Johnson & Johnson’s stock price rose 6.8% in 1Q17. On April 6, 2017, the stock’s price had risen 8.3% year-to-date (or YTD).

Analysts’ recommendations

Wall Street analysts estimate that the stock has the potential to return ~3.0% over the next 12 months. Analysts’ recommendations show a 12-month target price of $128.56 per share, compared to the stock’s price of $124.80 per share on April 5, 2017.

There are 20 analysts tracking Johnson & Johnson stock, and 40% recommend “buys,” while 60% recommend “sells.” The consensus rating for Johnson & Johnson stands at 2.5, a moderate “buy” for value investors.

Analysts’ revenue estimates

Johnson & Johnson’s revenue has risen over the past few years following its restructuring of its business segments and the strong performances of the following products:

  • key immunology and oncology products in its Pharmaceuticals segment
  • beauty care products and over-the-counter (or OTC) products in its Consumer segment
  • orthopedics, specialty surgery, and vision care products in its Medical Devices segment

Analysts’ estimates show revenue of $18.0 billion, a 3% rise over 1Q16, and earnings per share (or EPS) of $1.76 for JNJ in 1Q17.

To divest company-specific risk, investors can consider ETFs such as the iShares Global Healthcare ETF (IXJ), which holds 7.7% of its total assets in Johnson & Johnson, 4.9% in Pfizer (PFE), 4.4% in Merck & Co. (MRK), and 3.1% in Amgen (AMGN).

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