June 8, 2023
Top 10 Stock Johnson & Johnson Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Johnson & Johnson – Top 10 Stock in Dow Jones Industrial Average
Johnson & Johnson is listed as a top 10 stock on June 08, 2023 in the market index Dow Jones because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 35 (35% performer), Obermatt assesses an overall hold recommendation for Johnson & Johnson on June 08, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Pharmaceuticals |
| Index | Dow Jones, Dividends USA, Diversity USA, Human Rights, Moonshot Tech, D.J. US Pharmaceutical, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment Johnson & Johnson Hold
| 360 METRICS | June 8, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 56 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 21 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 63 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 50 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 35 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 35 (better than 35% compared with alternatives), overall professional sentiment and engagement for the stock Johnson & Johnson are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Johnson & Johnson. The consolidated Value Rank has an attractive rank of 56, which means that the share price of Johnson & Johnson is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 56% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 63. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 50. But the consolidated Growth Rank has a low rank of 21, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 79 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 35, Johnson & Johnson is worse than 65% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 56), secure financing practices (Safety Rank of 63), and positive market sentiment in the professional investor community (Sentiment Rank of 50). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 21), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Johnson & Johnson is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Johnson & Johnson positive
ANALYSIS: With an Obermatt Sentiment Rank of 50 (better than 50% compared with alternatives), overall professional sentiment and engagement for the stock Johnson & Johnson is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Johnson & Johnson. Analyst Opinions are at a rank of 21 (worse than 79% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 93, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Johnson & Johnson. More encouragingly, the Professional Investors rank is 96, which means that professional investors hold more stock in this company than in 96% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 5, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 95% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 50 (more positive than 50% compared with investment alternatives), Johnson & Johnson has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for Johnson & Johnson. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Johnson & Johnson Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 56 (better than 56% compared with alternatives), Johnson & Johnson shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Johnson & Johnson. Price-to-Profit (also referred to as price-earnings, P/E) is 54 which means that the stock price compared with what market professionals expect for future profits is lower than for 54% of comparable companies, indicating a good value concerning Johnson & Johnson's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 14, which means that the stock price is lower as regards to invested capital than for 14% of comparable investments. On the other hand, Price-to-Sales is less favorable than 81% of alternatives (only 19% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 4% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 56, is a BUY recommendation based on Johnson & Johnson's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Johnson & Johnson Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), Johnson & Johnson shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Johnson & Johnson. Sales Growth has a below market rank of 12, which means that, currently, professionals expect the company to grow less than 88% of its competitors. The same is valid for Capital Growth, with a rank of 39, and Profit Growth, with a rank of 39. Currently, professionals expect the company to grow its profits less than 61% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 55, which means that the stock returns have recently been above 55% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 21, is a SELL recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Johnson & Johnson, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Johnson & Johnson Debt Financing Safety above-average
| SAFETY METRICS | June 8, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 54 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 10 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 63 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 63 (better than 63% compared with alternatives), the company Johnson & Johnson has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Johnson & Johnson is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Johnson & Johnson. Leverage is at a rank of 54, meaning the company has a below-average debt-to-equity ratio. It has less debt than 54% of its competitors. Liquidity is also good at a rank of 98, meaning the company generates more profit to service its debt than 98% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 10, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 90% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 63 (better than 63% compared with alternatives), Johnson & Johnson has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Johnson & Johnson. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Johnson & Johnson Below-Average Financial Performance
| COMBINED PERFORMANCE | June 8, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 56 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 21 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 98 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 33 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 33 (worse than 67% compared with investment alternatives), Johnson & Johnson (Pharmaceuticals, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Johnson & Johnson are a good value (attractively priced) with a consolidated Obermatt Value Rank of 56 (better than 56% of alternatives), are safely financed (Safety Rank of 63, which means low debt burdens), but show below-average growth (Growth Rank of 21). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 33, is a hold recommendation based on Johnson & Johnson's financial characteristics. As the company Johnson & Johnson's key financial metrics exhibit good value (Obermatt Value Rank of 56) but low growth (Obermatt Growth Rank of 21) while being safely financed (Obermatt Safety Rank of 63), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 56% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.