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Johnson & Johnson (JNJ) stock analysis

J&J near record highs after a 41% one-year run; earnings quality and a high forward multiple in focus

Johnson & Johnson closed at 268.73 on Oct 27, 2026, 4.39% below its 52-week and all-time high of 281.07, with a 1-year return of 41.14%. Revenue growth is steady and margins are strong, but the latest quarter's net income was only 210.0M and the forward P/E of 23.17 sits well above the industry median of 15.05. Analysts rate it Buy on average with a mean target of 287.40.

  • Price: 268.73
  • Market Cap (USD): $657.73B
  • P/E: 40.87×
  • Fwd P/E: 23.17×
  • Div Yield: 1.96%
  • 1Y Return: 41.14%
  • Next Earnings: Jan 20, 2027
  • Mean Target: 287.40
  • Rating: Buy

Bull case

  • Revenue grew 7.80% year over year to a TTM of $99.33B, with an operating margin of 25.70% (80th percentile of US Healthcare) and ROIC of 18.51% versus a sector median of 10.40%.
  • Free cash flow TTM is 20.59B, up 7.93% year over year, covering the dividend of 5.28 per share, which has grown for 29 years.
  • The stock trades 9.20% above its 200-day average of 246.10, with a relative strength rating of 87 and a 1-year return of 41.14% (73rd percentile of the sector).

Bear case

  • Forward P/E is 23.17 (on next year's consensus EPS of 11.60), the 69th percentile of US Healthcare against a sector median of 17.62; the PEG ratio is 5.30.
  • Q3 FY2026 net income was 210.0M with diluted EPS of 0.0858 against 5.15B and 2.12 a year earlier, and trailing EPS growth is -36.33%.
  • Insiders made 8 sales and no buys in the past 90 days, with a net value of -58.9M, and the shares reacted -3.72% to the Oct 13, 2026 earnings report despite a 2.78% EPS beat.

What to watch

  • Next earnings on Jan 20, 2027 (confirmed), with a consensus EPS of 2.91.
  • Ex-dividend date Nov 24, 2026 for a 1.34 quarterly dividend, payable Dec 8, 2026.
  • The 52-week and all-time high of 281.07, and the 20-day high of 272.36 set on Oct 26.
  • The 50-day average at 265.45 and the 200-day average at 246.10 as support reference levels.

General

Johnson & Johnson is a healthcare holding company with Innovative Medicine and MedTech segments. The business is growing revenue and generating strong cash flow, and the stock is near its high. The valuation is a premium to peers, and the latest quarter's earnings were weak.

Business

The company researches, makes and sells healthcare products. Innovative Medicine brought in 60.40B (64.12% of FY2025 revenue) and MedTech 33.79B (35.88%). The United States made up 57.07% of FY2025 revenue, followed by Europe at 22.86%.

Performance and valuation

TTM revenue is $99.33B, up 7.80%, with a net margin of 16.20%. The forward P/E of 23.17 (on next year's consensus EPS) compares with an industry median of 15.05. The FCF yield is 3.13% and the dividend yield is 1.96%.

Analysts and market signals

As of Oct 28, 2026, the tally is 21 Buy, 16 Hold and 3 Sell, with a mean target of 287.40 (6.95% above the price). Johnson Rice downgraded to Hold on Oct 21, 2026. Short interest is low at 0.69% of float as of Oct 15, 2026.

Long-term investor

The company combines mid-single-digit revenue growth, high returns on capital and a modest net debt load. Cash returns are substantial, but the valuation is above peers and next-year EPS growth is low relative to the sector.

Growth and margins

Revenue rose from 79.99B in FY2022 to 94.19B in FY2025, with a 3-year CAGR of 5.60% and a 5-year CAGR of 2.67%. Gross margin is 68.81% and operating margin 25.70%, down 0.40% over the year. EPS is volatile (FY2024 5.79, FY2025 11.03), so reported earnings are an unreliable trend guide.

Balance sheet and returns

ROIC is 18.51% and ROE 20.02%. Net debt is 27.42B, or 0.89× EBITDA, with interest coverage of 31.99×. The current ratio is 1.02×. Goodwill is 48.47B against equity of 81.53B.

Cash returned and valuation

FY2025 dividends were 12.38B and buybacks 5.95B. The payout ratio is 80.05% and shares outstanding rose 0.82% over the year. The forward P/E of 23.17 is in the 69th percentile; EPS growth for next year is 4.37%, the 10th percentile of the sector.

Insiders and institutions

Institutions own 74.50%, up 1.38% over 3 months. Insiders made 8 sales and no buys in 90 days, including CEO Joaquin Duato's 26.7M sale on Aug 13, 2026.

Swing trader

The trend is up, with the price above the 20-, 50- and 200-day averages. Momentum is positive but trend strength is weak, and the stock is close to the upper Bollinger Band and the 20-day high.

Trend and momentum

The price of 268.73 is above the 20-day (258.80), 50-day (265.45) and 200-day (246.10) averages. RSI14 is 57.53, RSI2 is 82.36, the MACD histogram is 1.67 and ADX is 16.2, indicating a weak trend. The stochastic reading of 86.65 is elevated.

Recent sessions and levels

The stock fell to 248.61 on Oct 13 on 16.6M shares after earnings, then recovered to 268.73. Nearby levels are the 20-day high of 272.36, the Bollinger upper band of 269.60 and the 52-week high of 281.07. The 20-day low is 245.17. Volume on Oct 27 was 0.77× average.

Risk and flow

ATR14 is 6.35, or 2.36% of price. Short interest fell 24.03% to 16.8M shares (0.69% of float) on Oct 15. Johnson Rice downgraded on Oct 21; Evercore ISI set a target of 300 on Oct 20.

Options

Implied volatility is mid-range and below recent realized volatility, so option premium is not rich relative to recent moves. The term structure is flat, liquidity is strong, and put volume outweighs calls even though call premium dominates.

Volatility level

IV30 is 24.25%, with an IV rank of 56 and an IV percentile of 68 against a 52-week range of 15.39% to 31.29%. IV30 fell 2.6 pts over 20 days. The 30-day implied/realized ratio is 0.90× (HV30 27.09%), and the volatility risk premium is -8.3 pts, so premium is cheap relative to realized volatility.

Term structure and expected move

IV60 is 24.38% and IV90 is 24.75%, a flat curve. The 25-delta skew is +2.4 pts. The 30-day expected move is 6.95% (18.69) and the 7-day move is 3.36%. The next earnings fall outside the 30-day expiry.

Earnings history and premium yields

Average earnings moves were 1.42% over 4 quarters and 1.52% over 8, with a median of 0.66% and a maximum of 5.03%. For the Nov 27, 2026 expiry, the cash-secured put yield is 20.60% annualized and the covered call yield is 14.06%; an ex-dividend date falls before expiry.

Activity and liquidity

The liquidity score is 91 and open interest is 360.5K. The put/call volume ratio is 1.82×, yet call premium of $38.9M exceeds put premium of $5.9M. The unusual activity score is 1.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.