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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Johnson & Johnson (XNYS:JNJ) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
JNJ
Name:
JOHNSON & JOHNSON (XNYS:JNJ)
Sector:
3.37B
Industry:
Drug Manufacturers�General
CEO:
Mr. Alex Gorsky
Total Employees:
141,700
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 64.04% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF JOHNSON & JOHNSON(JNJ) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DRUG MANUFACTURERS�GENERAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
162.74
One Month Price Target:
$163.29
Six Month Price Target :
$166.06
Likely Price in One Year's Time:
Ticker:
$169.38
Likely Trading Range Today Under (Normal Volatility)
$162.4
Price Upper limit ($) :
$163.18
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$158.08
This week:
$152.32
This month :
$141.89
Other Primary facts
Market Cap:
429.69B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
2.63B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
8.%
-7.3%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$184.37
$174.42
$141.11
$151.06
Medium risk (<10%) entry points
Buy Call
Sell Call
$171.19
Buy Put:
Sell Put:
$169.06
$154.27
$156.42
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
JNJ
Sharpe Ratio:
1.56%
Comparison:
JNJ, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -20.60% lower than the industry
& is -31.72% lower than the market/S&P 500 average
Average Returns/Yield of
JNJ
Daily returns:
0.03%
Weekly returns:
0.15%
Monthly returns:
0.62%
Yearly returns:
11.30%
Comparison of returns:
Average annual returns/yield (last 3 years) is -34.64% below industry average
Classification:
JNJ, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.74
Statistical test of Returns:
JNJ has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.41%
Weekly Volatility:
3.15%
Monthly Volatility:
6.30%
Yearly Volatility:
21.84%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.75%
Volatility in last five trading days has been 24.15% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-2.86%
Weekly VaR:
-6.41%
Monthly VaR:
-12.81%
How Much Can the price of
JNJ
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-11%
Worst case (decline):
-44.38%
This translates to price declining to:
$144.88
This translates to price declining to:
$90.52
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
JNJ is -9.59% less risky an investment compared to the market/S&P 500 & is -22.54% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -25.72% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
JNJ
Beta in relation to market/S&P 500--0.61
Expected beta in 1 year's time:
0.552
Expected beta in 3 year's time:
0.78
Unlevered (debt free) Beta:
0.446
Beta in relation to Nasdaq (XNAS):
0.383
Beta in relation to all global stocks::
0.513
Beta Comparison & Analysis
Beta of competitors/peers::
0.625
Beta is -2.93% lower than peers
Average Industry Beta:
0.492
Beta is 23.44% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
21.30%
Sustainable growth rate is -69.71% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.001
Alpha is -98.31% below industry average alpha yield
Alpha is 5% compared to market & is healthy
Analysis of Cost of Capital of
JNJ
Equity cost of capital:
0.073
Equity cost of capital is 12.11% above industry mean WACC
Unlevered (without debt) cost of capital:
5.37%
Before-tax cost of debt:
0.40%
After-tax cost of debt:
0.31%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.31%
WACC is 22.89% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$36.09
Revenue growth rate per share of (3Y):
5.73
Annual revenue growth rate is -56.38% below industry average
EPS:
$7.42
Expected Annual growth rate of EPS (3Y):
10.79%
Expected future EPS growth rate is -692.03% lower than the Drug Manufacturers�General industry
Free cash flow (FCF) per share:
$7.42
Balance sheet equity growth per share: 19.42%
Equity growth rate per share is -16.12% lower than the industry
Debt per share
$10.97
EBITDA per share
$10.21
Valuation Analysis Today of
JNJ
P/E Ratio:
23.66
P/E Ratio of Competitors/Peers:
24.18
P/E ratio is -2.16% lower than main peers & is 30.80% higher than the industry
Stock price/value with industry average P/E ratio: $134.21
JNJ is 21.26% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $100.85
Present value of the expected future dividends only: $79.51
P/S (Price to Sales ratio):
4.51
Price to sales ratio is 21.41% above the industry mean
P/B (Price to book value ratio):
5.73
Price to free cash flow: 21.93
-
Net income growth rate (3Y):
1053.35%
Net income growth rate is 693.47% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 14.05%
Dividend yeild: 2.65%
Previous Dividend: $1.13
Previous adjusted dividend: $1.13
Previous Dividend: $4.31
Expected next dividend best case: $1.17
Expected next dividend worst case: $1.09
Average dividend payment (long-term): $1.03
Average dividend increase/decrease (growth rate) % per period: 1.79%
Expected next dividend payment date: 09/05/2022
Expected next dividend record date: 22/08/2022
Expected next dividend declaration date: 18/07/2022
Previous dividend payment date: 06/07/2022
Previous dividend record date: 24/05/2022
Previous dividend declaration date: 19/04/2022
Dividend History:
2022-05-23--$1.13
2021-11-22--$1.06
2021-05-24--$1.06
2022-02-18--$1.06
2021-08-23--$1.06
2021-02-22--$1.01
Dividend growth rate is -76.19% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
38.62%
Net debt to equity ratio:
30.36%
Debt to assets ratio:
16.18%
Net debt to assets ratio:
12.72%
Debt-to-asset ratio is -76.25% below industry average
Ability to repay debt:
Interest coverage ratio:
203.31
Interest coverage ratio is 374.27% more than industry average
Looking forward:
Debt growth rate:
27.33%
Annual debt growth is -4965% lower than industry average debt growth rate
Debt repayment rate in last quarter: 9.38%
Analysis of Key Statistics
Correlation of price movement with the market:
0.631
Statistical significance of correlation:
JNJ has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.517
Stock price is 21.90% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.517
Correlation of price movement with Nasdaq (^IXIC):
0.014
Covariance of price movement with the market:
0.011
Kurtosis
7.845
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.402
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
JNJ
Gross Profit Margin Ratio:
272%
Operating Profit Margin Ratio:
25.64%
Operating profit margin is 18.09% higher than the industry
Net Profit Margin Ratio:
272%
Effective Tax Rate:
6.50%
Effective tax rate is -37.89% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
26.54%
Return on equity (ROE) is -73.56% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
11.12%
Return on assets (ROA) is 7.02% higher than the industry
Financial Leverage:
1.2x
Current Ratio:
1.39
Current ratio is -1.14% below industry average
Cash Conversion Cycle (days):
-44.4
Cash conversion cycle is -144.65% below industry average
The remaining useful life of property plant & equipment is: 5.8 years
Stock based compensation to net income ratio:
1.40%
In-depth Efficiency Analysis
Revenue generated per employee:
669.6K
Each employee generates -41% less revenue than industry average revenue per employee
EBITDA generated per employee:
189.4K
Each employee generates -52% less EBITDA than industry average revenue per employee
Profit generated per employee:
139.9K
Each employee generates -37% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
23.8K
Each employee generates -66% less free cash flow than industry average revenue per employee
Assets/Capital per employee
832.3K
Each employee generates -66% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 7.08%
Growth rate in R&D investment/expenditure is -69.43% lower than the industry
Competitors/Peer firms of
JNJ
UNITEDHEALTH GROUP INCORPORATED (XNYS:UNH)
PFIZER INC. (XNYS:PFE)
ELI LILLY AND COMPANY (XNYS:LLY)
THERMO FISHER SCIENTIFIC INC. (XNYS:TMO)
ABBVIE INC. (XNYS:ABBV)
Novo Nordisk A/S (XNYS:NVO)
DANAHER CORPORATION (XNYS:DHR)
MERCK & CO., INC. (XNYS:MRK)
Novartis Inc. (XNYS:NVS)
Current Analyst Ratings
Strong buy�17%
Buy�33%
Hold�33%
Sell�8%
Strong sell�4%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/3/22
Revenue:
94.88B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
30.39B
64.49B
15.00B
-
25.17B
-
-
40.16B
38.00M
132.00M
5.50B
26.84B
24.33B
19.83B
21.21B
1.38B
19.83B
Statement of Cash Flow
Date:
Period:
1.77B
Differed Income Tax :
- 926000.00K
Stock Based Compensation :
278.00M
Change in Working Capital :
1.28B
Accounts Receivables:
- 427000.00K
Other Working Capital:
17.03B
Other Non-Cash Items:
- 3572000.00K
Net Cash Provided by Operating Activities:
3.98B
Investments in PP&E:
- 607000.00K
Net Acquisitions:
248.00M
Purchases of Investments:
- 9018000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/3/22
2022
Q1
10.46B
19.93B
30.39B
15.59B
10.99B
3.45B
60.42B
18.70B
34.94B
44.42B
-
9.94B
9.94B
117.93B
-
178.36B
9.31B
4.30B
1.71B
-
29.78B
43.39B
28.85B
24.98B
60.26B
-
103.65B
3.12B
124.38B
- 13757000.0K
-
April 3, 2022 at 6:00:00 AM
70.55B
74.71B
178.36B
-
33.15B
22.7B
6.30B
- 560000.00K
- 3634000.00K
- 2988000.00K
-
- 1577000.00K
- 2787000.00K
2.97B
- 4385000.00K
16.00M
- 4024000.00K
10.46B
14.49B
3.98B
- 607000.00K
3.37B
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
JNJ
2023
2024
2025
2026
2027
$204.18
$212.51
$221.17
$230.20
$239.59