20 Jun

How Johnson & Johnson’s Valuation Compares

WRITTEN BY Sarah Collins FEATURED IN Company News, Insights, & Analysis

Johnson & Johnson’s valuation

Johnson & Johnson (JNJ), one of the world’s largest healthcare companies, has a diversified business spanning its consumer, medical device, and pharmaceutical segments. The company reported sales of $20 billion in Q1 2018 and adjusted EPS of $2.06. Let’s look at Johnson & Johnson’s valuation metrics.

How Johnson & Johnson’s Valuation Compares

Forward PE multiples

Forward PE multiples, the most widely used valuation metrics, represent how much an investor is willing to pay for a unit of companies’ expected earnings over the next 12 months. They are calculated by dividing a company’s current stock price by its next-12-month earnings estimate per unit of stock. As of June 19, Johnson & Johnson was trading at a forward PE multiple of ~14.7x, whereas the industry average was 16.2x and peers Novartis (NVS), Merck (MRK), and Eli Lilly (LLY) had PE multiples of 13.5x, 13.9x, and 16.3x, respectively. 

Forward EV-to-EBITDA multiples

Johnson & Johnson’s forward EV[1.enterprise value]-to-EBITDA multiple is ~11.3x, lower than the industry average of ~12.7x and peers’ multiples—Novartis, Merck, and Eli Lilly have forward EV-to-EBITDA multiples of 12.6x, 11.4x, and 13x, respectively.

Be sure to check out all the data we’ve added to our quote pages. Now you can get a valuation snapshot, earnings and revenue estimates, and historical data, as well as dividend information. Take a look!

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