JNJ
Johnson & Johnson$243.45
Sell
Target $194.48
Report: Mar 07, 2026Healthcare • Drug Manufacturers - General • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$243.45-20.1%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$194.48
(20% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$251.71
52 Week Low$141.50
Avg. 3 Month Volume8.75M
Efficiency
LTM Gross Margin67.9%
LTM EBITDA Margin43.6%
LTM EBIT Margin35.6%
LTM Operating Margin26.8%
LTM ROA13.8%
LTM ROE33.8%
LTM ROIC46.3%
LTM ROCE24.2%
Capital Structure
Market Cap (MM)$589.1B
Enterprise Value (MM)$617.3B
Shares Outstanding2.41B
Total Debt (MM)$47.93B
Cash & Equivalents (MM)$19.71B
LTM Net Debt (MM)$28.22B
LTM Net Debt/EBITDA0.7x
Growth
TTM Rev. Growth6.0%
Last 3-Yr Rev. CAGR-0.3%
Last 3-Yr EBITDA CAGR12.3%
Last 3-Yr EPS CAGR17.7%
Valuation
Street Target Price$228.73
LTM EV/Revenue6.6x
LTM EV/Gross Profit9.7x
LTM EV/EBIT18.4x
LTM EV/EBITDA15.0x
LTM P/E22.0x
LTM EV/FCF31.3x
LTM P/FCF29.9x
LTM P/TB5.9x
LTM P/B7.2x
Dividend Yield2.1%
Payout Ratio46.2%
Executive SummarySituation: Current price is $243.45 versus fair value $194.48 (-20.1% expected return), and valuation confidence is stable. Debate: Bull case depends on Stelara Biosimilar Market Entry As biosimilars enter the market more aggressively, the 620-basis-point revenue headwind will become a visible drag on top-line growth, forcing a re-evaluation of the 'catapult' narrative. Bear case centers on Moat Erosion via Biosimilars The mechanism is a permanent impairment of pricing power as Stelara and Xarelto face low-cost competition, leading to margin compression and lower ROIC. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
The MedTech segment becomes a high-growth engine through the integration of Shockwave and Abiomed, driving double-digit segment growth. The oncology pipeline, led by Darzalex (+24.1% growth), successfully offsets the Stelara revenue cliff.
Bear Case
Talc litigation results in a multi-billion dollar settlement that exceeds current accruals and impairs the AAA credit rating. Stelara biosimilar erosion is more aggressive than the projected 620-basis-point headwind, leading to absolute revenue contraction.
Key Catalysts
Near-Term (0-6 months)Impact: Critical
Stelara Biosimilar Market Entry As biosimilars enter the market more aggressively, the 620-basis-point revenue headwind will become a visibl...
Mid-Term (6-18 months)Impact: High
Talc Litigation Settlement or Verdict A major verdict or a comprehensive settlement agreement would provide clarity on the multi-billion dol...
Long-Term (18+ months)Impact: Moderate
JNJ is relevant for analysis now because it is trading near all-time highs ($243.45) despite a doubling of net debt and a looming patent cli...
Primary Risks
Concern: High
Moat Erosion via Biosimilars The mechanism is a permanent impairment of pricing power as Stelara and Xarelto face low-cost competition, lead...
Concern: High
Legal Liability Escalation The mechanism is a multi-billion dollar cash outflow from talc litigation that impairs the balance sheet and thre...
Concern: Medium
The stewardship verdict is 'Adequate but Misaligned.' While the board is exceptionally high-quality, featuring former CEOs of Lockheed Marti...
Recent Activity
2025-07-16SEC Filing (8-K)
+6.19%Johnson & Johnson reports 2025 Q2 results with 5.8% sales growth and raises full-year outlook
2025-04-01Press Release
-7.59%Johnson & Johnson To Return To Tort System To Defeat Meritless Talc Claims
2023-07-20SEC Filing (8-K)
+6.07%Johnson & Johnson reports 2023 Q2 results with 6.3% sales growth and raises full-year guidance
Valuation Table
9.8/10Decision Grade
Scenario Range
$133
Bear
$185
Base
$229
Bull
$243