Johnson & Johnson (JNJ) is up by 10.10%, and Gilead Sciences (GILD) is up by 10.92% on a YTD basis. Both the companies are struggling due to intense competitive pressures either from branded or generic competitors. To determine which of the two will be the better pick in the long run, we’ll evaluate the pros and cons of both the companies in greater detail.
Analysts’ recommendations and target price
The consensus recommendation for both Johnson & Johnson and Gilead Sciences is a “buy.” Wall Street analysts expect upside potential of 4.98% for Johnson & Johnson based on the company’s closing price on June 21. Analysts have gradually increased the company’s 12-month consensus target price from $144.71 in March to $147.53 in April to $148.35 in May to $149.17 in June. The highest and lowest target estimates are $163 and $125, respectively.
Out of 20 analysts covering Johnson & Johnson, four recommend a “strong buy,” seven recommend a “buy,” eight recommend a “hold,” and one recommends a “sell.” Wall Street analysts expect an upside potential of 15.26% for Gilead Sciences based on the company’s closing price on June 21. Analysts first increased the company’s 12-month consensus target price from $80.43 in March to $80.72 in April and then reduced it to $80.21 in May and then to $79.97 in June. The highest and lowest target estimate is $95 and $60, respectively.
Out of 28 analysts covering Gilead Sciences, seven recommend a “strong buy,” 11 recommend a “buy,” nine recommend a “hold,” and one recommends a “sell.”
Share price movements and valuation
On June 21, Johnson & Johnson closed at $142.09, 0.08% lower than the previous close, 18.30% higher than its 52-week low price of $120.11, and 4.63% lower than its 52-week high price of $148.99. The company’s market capitalization is $378.93 billion and its PE, forward PE, PEG (PE to Growth), PS (price-to-sales), PB (price-to-book), and PC (price-to-cash) ratios were 26.31x, 15.53x, 4.06x, 4.64x, 6.41x, and 24.71x, respectively.
On June 21, Gilead Sciences closed at $69.38, 1.18% higher than the previous close, 15.02% higher than its 52-week low price of $60.32, and 12.85% lower than its 52-week high price of $79.61. The company’s market capitalization is $89.06 billion and its PE, forward PE, PEG, PS, PB, and PC ratios were 15.29x, 9.98x, 4.25x, 3.99x, 4.03x, and 3.19x, respectively.
Compared to Johnson & Johnson, Gilead Sciences is trading at a lower PE, forward PE, PS, PB, and PC ratios, but a higher PEG ratio.