Key Stats for Johnson & Johnson Stock
- This-Week Performance: 6%
- 52-Week Range: $142 to $241
- Valuation Model Target Price: $260
- Implied Upside: 8%
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What Happened?
Johnson & Johnson stock rose about 6% this week, finishing near $240 per share, as investors responded to improving confidence in the company’s earnings outlook following its Q4 earnings update and visible institutional repositioning. The move pushed shares toward the top of their 52-week range, signaling sustained demand rather than a short-lived reaction.
Shares moved higher this week after Johnson & Johnson reported better-than-feared earnings momentum and issued solid 2026 growth guidance, with Q4 sales of $24.6 billion, up 7.1%, and full-year revenue of $94.2 billion, growing 5.3% operationally despite a sizable STELARA headwind.
CEO Joaquin Duato described 2025 as “a catapult year for Johnson & Johnson,” highlighting accelerating pharmaceutical growth, strong oncology performance, and guidance calling for 2026 operational sales growth of 5.7% to 6.7% to roughly $100 billion, reinforcing confidence in earnings durability.
Institutional activity added context to the move, showing rotation rather than broad exits. Guinness Asset Management increased its stake to 1.38 million shares worth about $251 million, making Johnson & Johnson 4.0% of its portfolio, while Triglav Investments boosted its position by 36% to 82,800 shares.
Offsetting those additions, Garland Capital Management reduced its stake by 74.4%, Aurdan Capital trimmed by 22.1%, and Wells Trecaso cut its position by 41.9%, reflecting selective profit-taking after the stock’s recent strength.
Overall, filings show that institutional investors still own about 69.6% of Johnson & Johnson, underscoring its role as a core holding despite ongoing portfolio rebalancing.
Combined with reaffirmed growth guidance and improving visibility into the pharmaceutical pipeline, this week’s move suggests investors are leaning into stability, cash flow strength, and predictable earnings rather than short-term catalysts.
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Is Johnson & Johnson Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 6.1%
- Operating Margins: 34.5%
- Exit P/E Multiple: 17x
Revenue growth assumptions reflect a normalized mid-single-digit trajectory supported by Johnson & Johnson’s pharmaceutical portfolio, where oncology, immunology, and neuroscience therapies continue to scale and offset slower growth in mature products.
The forecast also assumes sustained margin strength, as a richer innovative-medicine mix and reduced exposure to lower-margin consumer assets allow earnings to grow slightly faster than revenue.
Based on these inputs, the valuation model estimates a target price of about $260, implying roughly 8% total upside or 2.7% annualized returns over the next 2.9 years, which places the stock in the overvalued range under a framework where annual returns below 5% are considered unattractive.
Near-term performance depends on continued uptake of key drugs such as DARZALEX, TREMFYA, CARVYKTI, and CAPLYTA, along with steady MedTech execution, but the model suggests much of this progress is already reflected in the current share price.
At today’s level, Johnson & Johnson appears modestly overvalued, with stronger returns requiring upside surprises in pipeline execution, margin expansion, or capital allocation beyond current expectations.
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