January 18, 2024
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 January 18, 2024 in the market index Dow Jones because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 27 (27% performer), Obermatt assesses an overall hold recommendation for Johnson & Johnson on January 18, 2024.
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° View Johnson & Johnson Hold
| 360 METRICS | January 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 73 |
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| SENTIMENT | ||||||||
| SENTIMENT | 25 |
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| 360° VIEW | ||||||||
| 360° VIEW | 27 |
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ANALYSIS: With an Obermatt 360° View of 27 (better than 27% compared with alternatives), overall professional sentiment and financial characteristics for the stock Johnson & Johnson are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Johnson & Johnson. The consolidated Value Rank has an attractive rank of 54, which means that the share price of Johnson & Johnson is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 54% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 73. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 25. Professional investors are more confident in 75% other stocks. The consolidated Growth Rank also has a low rank of 29, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 71 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 27, Johnson & Johnson is worse than 73% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 54), and the financing structure is on the safer side (Safety Rank of 73). However, sentiment in the professional investor community is below-average (Sentiment Rank of 25), as is the growth momentum for the company (Growth Rank of 29). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Johnson & Johnson only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 25 (better than 25% compared with alternatives), overall professional sentiment and engagement for the stock Johnson & Johnson is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Johnson & Johnson. Analyst Opinions are at a rank of 17 (worse than 83% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 30, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 26, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 74% of competitors). On the upside, the Professional Investors rank is 100, which means that professional investors hold more stock in this company than in 100% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 25 (less encouraging than 75% compared with investment alternatives), Johnson & Johnson has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Johnson & Johnson stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Johnson & Johnson Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 54 (better than 54% 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 three out of four indicators below average for Johnson & Johnson. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 96% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 18 which means that the stock price compared with what market professionals expect for future profits is higher than 82% of comparable companies, indicating a low value concerning Johnson & Johnson's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 44 which means that the stock price compared with what market professionals expect for future profit levels is higher than 56% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 17 is also low. Compared with invested capital, the stock price is higher than for 83% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 54, is a buy recommendation based on Johnson & Johnson's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Johnson & Johnson? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Johnson & Johnson only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Johnson & Johnson Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), Johnson & Johnson shows a below-average growth dynamic in its industry. There is limited 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 37, which means that, currently, professionals expect the company to grow less than 63% of its competitors. The same is valid for Capital Growth, with a rank of 23, and Profit Growth, with a rank of 45. Currently, professionals expect the company to grow its profits less than 55% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 51, which means that the stock returns have recently been above 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold 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 | January 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 55 |
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| REFINANCING | ||||||||
| REFINANCING | 21 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 73 |
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ANALYSIS: With an Obermatt Safety Rank of 73 (better than 73% 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 55, meaning the company has a below-average debt-to-equity ratio. It has less debt than 55% 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 21, 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 79% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 73 (better than 73% 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 Above-Average Financial Performance
| COMBINED PERFORMANCE | January 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| COMBINED | ||||||||
| COMBINED | 60 |
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ANALYSIS: With an Obermatt Combined Rank of 60 (better than 60% compared with investment alternatives), Johnson & Johnson (Pharmaceuticals, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Johnson & Johnson are a good value (attractively priced) with a consolidated Value Rank of 54 (better than 54% of alternatives), are safely financed (Safety Rank of 73, which means low debt burdens), but show below-average growth (Growth Rank of 29). ...read more
RECOMMENDATION: A Combined Rank of 60, is a buy recommendation based on Johnson & Johnson's financial characteristics. As the company Johnson & Johnson's key financial metrics exhibit good value (Obermatt Value Rank of 54) but low growth (Obermatt Growth Rank of 29) while being safely financed (Obermatt Safety Rank of 73), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 54% 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
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