Will Johnson & Johnson (JNJ, $128.83) Lose Investor Interest in the Long Run?
Johnson & Johnson’s fourth quarter results reveal that sales were up just 1% to $20.4 billion, with adjusted net income coming-in at just $5.37 billion, which is $1.97 per share. These results gave evidence of gradual slowing compared to what this healthcare giant has witnessed in revenue growth recently.
A few items played significant roles in hurting J&J’s growth. Decreasing sales in certain quarters owing to negative currency effects; the net impact of acquisitions and divestitures during the year also affected performance without which worldwide sales would have risen 5.5%, with international sales climbing 7.8% and U.S. sales rising by 3.4% on an operational basis.
J&J’s pharmaceutical segment emerged as the market leader in 2018 and registered recorded sales after growing by 5.3%. But areas like neuroscience and cardiovascular still remain weak spots for the company. The consumer segment also saw an overall sales decline of 0.1%, while revenue in the wound care and baby care took the biggest hit.
Guidance indicates that the company expects to deliver sales in the range of $80.4 billion and $81.2 billion for 2019, and that's keeping the investors hopeful. It represents operational growth of just 0% to 1%, and even after making adjustments to those figures, growth could be limited to only 2% to 3% for the year.
In addition to poor sales growth, legal issues are also a concern. Litigation expenses almost doubled last year, owing to allegations from customers regarding safety issues with the company’s talc powder products that may be unfavorable for future customers.
What is more concerning now is that if the pharmaceutical segment fails to generate revenue, there is little for the company to attract investors.
JNJ in +1.86% Uptrend, growing for three consecutive days on October 23, 2024
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where JNJ advanced for three days, in of 345 cases, the price rose further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 15, 2024. You may want to consider a long position or call options on JNJ as a result. In of 81 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for JNJ just turned positive on October 15, 2024. Looking at past instances where JNJ's MACD turned positive, the stock continued to rise in of 47 cases over the following month. The odds of a continued upward trend are .
JNJ moved above its 50-day moving average on October 15, 2024 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for JNJ crossed bullishly above the 50-day moving average on October 22, 2024. This indicates that the trend has shifted higher and could be considered a buy signal. In of 19 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 60 cases where JNJ's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where JNJ declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
JNJ broke above its upper Bollinger Band on October 15, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for JNJ entered a downward trend on October 15, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (5.528) is normal, around the industry mean (5.632). P/E Ratio (30.342) is within average values for comparable stocks, (48.974). Projected Growth (PEG Ratio) (0.968) is also within normal values, averaging (3.004). Dividend Yield (0.030) settles around the average of (0.164) among similar stocks. P/S Ratio (4.744) is also within normal values, averaging (3.643).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 68, placing this stock better than average.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. JNJ’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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General Information
an investment holding company with interests in health care products
Industry PharmaceuticalsMajor