Drug Manufacturers - General · NYSE
Current Price
$228.24
Intrinsic Value
Use the calculator below to estimate
Run a PE ratio stock valuation on Johnson & Johnson with auto-filled earnings data, adjustable target PE, and instant fair value estimate.
Open PE Calculator for JNJJohnson & Johnson, together with its subsidiaries, researches and develops, manufactures, and sells various products in the healthcare field worldwide, but strategically separated its Consumer Health business into Kenvue Inc. in 2023 to focus on its higher-growth, innovation-driven segments; the former Consumer Health brands (including TYLENOL, LISTERINE, and BAND-AID) are now owned by Kenvue. The company's core focus is now split between its Innovative Medicine (formerly Pharmaceutical) segment, which offers prescription products for complex diseases such as rheumatoid arthritis, various cancers, HIV/AIDS, and neurodegenerative disorders; and its MedTech (Medical Devices) segment, which provides advanced technology solutions including electrophysiology products, neurovascular care products, orthopaedics (hips, knees, spine), advanced surgery solutions, and disposable contact lenses under the ACUVUE brand. Company's two remaining segments primarily serve hospitals, healthcare professionals, wholesalers, and retailers, continuing its mission of advancing human health since its founding in 1886 and its current basing in New Brunswick, New Jersey.
Earnings Yield
3.77%
ROE (TTM)
26.3%
Based on trailing twelve-month data, JNJ has earnings per share of N/A and trades at a PE ratio of N/A. These are key inputs for stock valuation using the PE ratio method.
The trailing twelve-month PE ratio of JNJ reflects how much investors pay per dollar of Johnson & Johnson's earnings. This metric is most useful when compared to Drug Manufacturers - General peers and the company's own historical range.
Whether JNJ is overvalued depends on comparing its PE ratio to Drug Manufacturers - General peers, historical averages, and growth expectations. A PE above the sector average may indicate overvaluation, but high-growth companies often command premium multiples. Consider pairing PE analysis with a DCF model for a more complete picture.
To value Johnson & Johnson using PE: (1) Compare the current PE against the Drug Manufacturers - General median to assess relative pricing, (2) check the PEG ratio to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
The PEG ratio divides the PE ratio by the expected earnings growth rate, providing a growth-adjusted valuation metric. A PEG below 1.0 may indicate undervaluation relative to growth, while above 2.0 may suggest overvaluation. PEG is most reliable for companies with stable, predictable earnings growth.
PE ratio gives a quick relative read — how JNJ is priced versus Drug Manufacturers - General peers. DCF provides an absolute value based on projected free cash flows. For JNJ, with a strong ROE of 26.3%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
