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Category: Stock Market and Johnson & Johnson
Date: 14 April 2020 Stock Price: $146.47 We take a look at the 1st quarter earnings report of their 2020 fiscal year of Johnson & Johnson the world's largest and most broad based healthcare company and owner of brands such as Listerine and Band-Aid. Has the group benefited from the Covid-19 pandemic and increased shopping on health related items shopping?
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About Johnson & Johnson
At Johnson & Johnson, we believe good health is the foundation of vibrant lives, thriving communities and forward progress. That’s why for more than 130 years, we have aimed to keep people well at every age and every stage of life. Today, as the world’s largest and most broadly based healthcare company, we are committed to using our reach and size for good. We strive to improve access and affordability, create healthier communities, and put a healthy mind, body and environment within reach of everyone, everywhere. Every day, our more than 130,000 employees across the world are blending heart, science and ingenuity to profoundly change the trajectory of health for humanity.
The image below shows a snapshot of Johnson & Johnson
The image below shows a snapshot of Johnson & Johnson
Overview of Johnson & Johnson's 1st quarter 2020 earnings report
Data below refers to the latest quarter unless stated otherwise:
- Sales: $20.691 billion (up from $20.021 billion for the same quarter of the previous year)
- Sales increased by 3.3% over the last 12 months
- Cost of products sold: $7.062 billion (up from $6.615 million for the same quarter of the previous year)
- Cost of products sold increased by 6.8% over the last 12 months
- Net earnings: $5.796 billion (up from $3.749 billion for the same quarter of the previous year)
- Diluted earnings per share: $2.17 (up from $1.39 for the same quarter of the previous year)
- Dividend declared for the quarter: $1.01
- Dividend yield of Johnson & Johnson: 2.76%
- Diluted weighted-average shares outstanding: 2.671 billion (down from 2.698 billion for the same quarter of the previous year)
Johnson & Johnson's management commentary on their 1st quarter 2020 earnings
New Brunswick, N.J. (April 14, 2020) – Johnson & Johnson (NYSE: JNJ) today announced results for first-quarter 2020. The Company also announced earlier today that its Board of Directors declared a 6.3% increase in the quarterly dividend rate, from $0.95 per share to $1.01 per share. At the new rate, the indicated dividend on an annual basis is $4.04 per share compared to the previous rate of $3.80 per share.
“With Johnson & Johnson’s century-plus history of leading in times of great challenge, we are mobilizing our resources across the Company in the fight against the COVID-19 pandemic,” said Alex Gorsky, Chairman and Chief Executive Officer. “Johnson & Johnson is built for times like this, and we are leveraging our scientific expertise, operational scale and financial strength in the effort to advance the work on our lead COVID-19 vaccine candidate. We are committed to beginning production at risk imminently and bringing an affordable and accessible vaccine to the public on a not-for profit basis for emergency pandemic use.”
Mr. Gorsky continued, “I am both proud and amazed at the level of dedication that I have witnessed from our more than 132,000 employees as we have focused on delivering on our commitments and responsibilities to the patients and consumers we serve. Our strong performance in the first quarter reflects the efforts of our teams around the world and the sustainability of our business model. Today, our Board of Directors approved an increase in our quarterly dividend for the 58th consecutive year, underscoring our commitment to delivering value for our shareholders and the confidence we have in our business now and in the future.”
Johnson & Johnson fiscal guidance updated for Covid-19 below
Mr. Gorsky continued, “I am both proud and amazed at the level of dedication that I have witnessed from our more than 132,000 employees as we have focused on delivering on our commitments and responsibilities to the patients and consumers we serve. Our strong performance in the first quarter reflects the efforts of our teams around the world and the sustainability of our business model. Today, our Board of Directors approved an increase in our quarterly dividend for the 58th consecutive year, underscoring our commitment to delivering value for our shareholders and the confidence we have in our business now and in the future.”
Johnson & Johnson fiscal guidance updated for Covid-19 below
Johnson & Johnson (NYSE: JNJ) stock price history
The image below, obtained from Google, shows the stock price history of Johnson & Johnson (NYSE: JNJ) over the last 5 years. And it's been an ok time for Johnson & Johnson stockholders. 5 years ago it was trading at around $99.60 and its currently trading at around $146.47 a stock. That's a return of 47.1% provided to Johnson & Johnson stockholders over the last 5 years.
The stock of Johnson & Johnson is trading at a lot closer to its 52 week high of $154.50 than it is to its 52 week low of $109.16 which to us is a clear indication that the short term sentiment and momentum of Johnson & Johnson's stock is very positive right now, which is pretty impressive considering how negative market sentiment has been in recent weeks.
The stock of Johnson & Johnson is trading at a lot closer to its 52 week high of $154.50 than it is to its 52 week low of $109.16 which to us is a clear indication that the short term sentiment and momentum of Johnson & Johnson's stock is very positive right now, which is pretty impressive considering how negative market sentiment has been in recent weeks.
Recent coverage of Johnson & Johnson
The extract below discusses the court ruling against Johnson & Johnson in the Risperdal antipsychotic drug case as obtained from Thestreet,com
Johnson & Johnson (JNJ) - Get Report posted stronger-than-expected first quarter earnings Tuesday but trimmed its full-year profit guidance amid the coronavirus pandemic.
Johnson & Johnson said adjusted earnings for the three months ending in March were pegged at $2.30 per share, up 9.5% from the same period last year and 31 cents ahead of the Street consensus forecast. Group revenues, J&J said, rose 6.7% last year to $20.7 billion and topped analysts' estimates of a $19.3 billion tally.
Johnson & Johnson also said it would pay a quarterly dividend of $1.01 per share, a 6.3% increase from its previous payout.
Looking into 2020, J&J said it sees full-year earnings of between $7.50 and $9.50, down from a prior forecast of $9.00 to $9.15 per share. Operational sales, the company said, will come in between $79.2 billion and $82.2 billion, compared to its January estimate of $85.8 billion, but latter added that forecasts will be predicated on the virus not returning with the same intensity in the autumn.
Read the full article here
Johnson & Johnson (JNJ) - Get Report posted stronger-than-expected first quarter earnings Tuesday but trimmed its full-year profit guidance amid the coronavirus pandemic.
Johnson & Johnson said adjusted earnings for the three months ending in March were pegged at $2.30 per share, up 9.5% from the same period last year and 31 cents ahead of the Street consensus forecast. Group revenues, J&J said, rose 6.7% last year to $20.7 billion and topped analysts' estimates of a $19.3 billion tally.
Johnson & Johnson also said it would pay a quarterly dividend of $1.01 per share, a 6.3% increase from its previous payout.
Looking into 2020, J&J said it sees full-year earnings of between $7.50 and $9.50, down from a prior forecast of $9.00 to $9.15 per share. Operational sales, the company said, will come in between $79.2 billion and $82.2 billion, compared to its January estimate of $85.8 billion, but latter added that forecasts will be predicated on the virus not returning with the same intensity in the autumn.
Read the full article here
Johnson & Johnson (NYSE: JNJ) latest stock valuation
So what is Johnson & Johnson's stock worth based on the release of their latest earnings report and the fiscal guidance provided by Johnson & Johnson? Based on their 1st quarter 2020 earnings report, and their fiscal guidance that has been adjusted downwards due to Covid-19 our valuation model provides a target price (full value price) for Johnson & Johnson at $126.70 a Johnson & Johnson stock. We therefore believe that the stock of Johnson & Johnson is slightly overvalued at its current price of $146.47
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $126.70. Therefore we see a good entry point into Johnson & Johnson stock at $114 or below. We expect the stock of Johnson & Johnson to pull back from its current price to closer to our target price (full value price) in coming weeks and months. We therefore rate Johnson & Johnson as a sell
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $126.70. Therefore we see a good entry point into Johnson & Johnson stock at $114 or below. We expect the stock of Johnson & Johnson to pull back from its current price to closer to our target price (full value price) in coming weeks and months. We therefore rate Johnson & Johnson as a sell