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Johnson & Johnson (JNJ) Gains As Market Dips: What You Should Know

Johnson & Johnson (JNJ) closed the most recent trading day at $160.65, moving +1.75% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.38%. Elsewhere, the Dow lost 0.22%, while the tech-heavy Nasdaq lost 0.12%.

Prior to today's trading, shares of the world's biggest maker of health care products had gained 5.49% over the past month. This has outpaced the Medical sector's gain of 2.06% and the S&P 500's gain of 4.12% in that time.

Investors will be hoping for strength from JNJ as it approaches its next earnings release, which is expected to be January 26, 2021. On that day, JNJ is projected to report earnings of $1.82 per share, which would represent a year-over-year decline of 3.19%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $21.73 billion, up 4.76% from the year-ago period.

Any recent changes to analyst estimates for JNJ should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.19% lower. JNJ is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that JNJ has a Forward P/E ratio of 17.77 right now. Its industry sports an average Forward P/E of 13.94, so we one might conclude that JNJ is trading at a premium comparatively.

We can also see that JNJ currently has a PEG ratio of 3.06. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 2.06 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 124, putting it in the top 49% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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