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Johnson & Johnson (JNJ) Gains But Lags Market: What You Should Know

Johnson & Johnson (JNJ) closed at $149.70 in the latest trading session, marking a +1.66% move from the prior day. This change lagged the S&P 500's 2.02% gain on the day. Meanwhile, the Dow gained 1.6%, and the Nasdaq, a tech-heavy index, added 2.71%.

Coming into today, shares of the world's biggest maker of health care products had gained 0.2% in the past month. In that same time, the Medical sector lost 2.71%, while the S&P 500 lost 0.39%.

Wall Street will be looking for positivity from JNJ as it approaches its next earnings report date. In that report, analysts expect JNJ to post earnings of $1.98 per share. This would mark a year-over-year decline of 6.6%. Meanwhile, our latest consensus estimate is calling for revenue of $20.40 billion, down 1.57% from the prior-year quarter.

JNJ's full-year Zacks Consensus Estimates are calling for earnings of $7.85 per share and revenue of $80.86 billion. These results would represent year-over-year changes of -9.56% and -1.46%, respectively.

It is also important to note the recent changes to analyst estimates for JNJ. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. JNJ is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note JNJ's current valuation metrics, including its Forward P/E ratio of 18.76. Its industry sports an average Forward P/E of 14.63, so we one might conclude that JNJ is trading at a premium comparatively.

Investors should also note that JNJ has a PEG ratio of 3.26 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 2.02 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 127, which puts it in the top 50% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow JNJ in the coming trading sessions, be sure to utilize Zacks.com.


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