Johnson & Johnson Valuation

Is JNJ undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of JNJ when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: JNJ ($149.31) is trading below our estimate of fair value ($267.08)

Significantly Below Fair Value: JNJ is trading below fair value by more than 20%.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for JNJ?

Key metric: As JNJ is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for JNJ. This is calculated by dividing JNJ's market cap by their current earnings.
What is JNJ's PE Ratio?
PE Ratio24.3x
EarningsUS$14.77b
Market CapUS$359.48b

Price to Earnings Ratio vs Peers

How does JNJ's PE Ratio compare to its peers?

The above table shows the PE ratio for JNJ vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average44.3x
MRK Merck
21.5x16.0%US$260.8b
LLY Eli Lilly
88.9x29.3%US$744.4b
PFE Pfizer
34.1x15.7%US$145.8b
ZTS Zoetis
32.8x10.0%US$79.6b
JNJ Johnson & Johnson
24.3x10.6%US$359.5b

Price-To-Earnings vs Peers: JNJ is good value based on its Price-To-Earnings Ratio (24.3x) compared to the peer average (44.3x).


Price to Earnings Ratio vs Industry

How does JNJ's PE Ratio compare vs other companies in the US Pharmaceuticals Industry?

8 CompaniesPrice / EarningsEstimated GrowthMarket Cap
OGN Organon
3x-7.1%US$3.89b
NDOI Endo
0.5xn/aUS$1.80b
KPRX Kiora Pharmaceuticals
1.9x-40.4%US$10.50m
EDXC Endexx
0.8xn/aUS$5.57m
JNJ 24.3xIndustry Avg. 19.3xNo. of Companies8PE01224364860+
8 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: JNJ is expensive based on its Price-To-Earnings Ratio (24.3x) compared to the US Pharmaceuticals industry average (19.3x).


Price to Earnings Ratio vs Fair Ratio

What is JNJ's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

JNJ PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio24.3x
Fair PE Ratio36.9x

Price-To-Earnings vs Fair Ratio: JNJ is good value based on its Price-To-Earnings Ratio (24.3x) compared to the estimated Fair Price-To-Earnings Ratio (36.9x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst JNJ forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$149.31
US$174.89
+17.1%
7.3%US$215.00US$155.00n/a23
Dec ’25US$155.01
US$174.89
+12.8%
7.3%US$215.00US$155.00n/a23
Nov ’25US$160.13
US$174.28
+8.8%
7.3%US$215.00US$155.00n/a22
Oct ’25US$161.99
US$171.32
+5.8%
8.0%US$215.00US$150.00n/a22
Sep ’25US$165.86
US$171.05
+3.1%
8.0%US$215.00US$150.00n/a22
Aug ’25US$160.76
US$170.67
+6.2%
8.0%US$215.00US$150.00n/a22
Jul ’25US$146.44
US$171.72
+17.3%
7.7%US$215.00US$155.00n/a22
Jun ’25US$146.67
US$171.94
+17.2%
7.8%US$215.00US$155.00n/a22
May ’25US$151.18
US$172.79
+14.3%
7.8%US$215.00US$155.00n/a21
Apr ’25US$157.78
US$175.41
+11.2%
7.1%US$215.00US$160.00n/a21
Mar ’25US$162.12
US$174.24
+7.5%
7.5%US$215.00US$157.00n/a21
Feb ’25US$158.36
US$174.55
+10.2%
7.4%US$215.00US$157.00n/a22
Jan ’25US$156.74
US$174.82
+11.5%
7.2%US$215.00US$157.00n/a22
Dec ’24US$158.38
US$174.55
+10.2%
7.4%US$215.00US$155.00US$155.0122
Nov ’24US$148.69
US$176.14
+18.5%
6.9%US$215.00US$157.00US$160.1322
Oct ’24US$155.75
US$179.81
+15.4%
6.5%US$215.00US$158.00US$161.9921
Sep ’24US$160.48
US$181.00
+12.8%
6.0%US$215.00US$164.00US$165.8621
Aug ’24US$168.89
US$182.35
+8.0%
6.1%US$215.00US$164.00US$160.7620
Jul ’24US$165.52
US$179.20
+8.3%
6.9%US$215.00US$161.00US$146.4420
Jun ’24US$154.54
US$179.20
+16.0%
6.9%US$215.00US$161.00US$146.6720
May ’24US$163.60
US$178.79
+9.3%
7.1%US$215.00US$161.00US$151.1819
Apr ’24US$155.00
US$177.90
+14.8%
7.2%US$215.00US$161.00US$157.7821
Mar ’24US$152.57
US$179.24
+17.5%
7.0%US$215.00US$161.00US$162.1221
Feb ’24US$164.92
US$180.90
+9.7%
6.5%US$215.00US$164.00US$158.3620
Jan ’24US$176.65
US$181.95
+3.0%
7.1%US$215.00US$160.00US$156.7422
Dec ’23US$178.74
US$182.25
+2.0%
7.1%US$215.00US$160.00US$158.3820

Analyst Forecast: Target price is less than 20% higher than the current share price.


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