Does Johnson & Johnson Stock Have More Upside?

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The price of Johnson & Johnson stock (NYSE: JNJ) has seen a rise of 5% in a month, while it’s up 4% YTD. This optimization can be attributed to a court ruling that supported the company’s plans to use the “Texas two-step” strategy. Under this, J&J will declare bankruptcy for its subsidiary that holds its talc-related litigation liabilities. This move will allow J&J to avoid fighting thousands of individual lawsuits. [1] J&J also announced the US FDA approval of its CAR-T therapy – Carvykti – used to treat Relapsed or Refractory Multiple Myeloma. While this approval is for the fifth line of treatment, the company is testing Carvykti as first-line therapy. Carvykti’s peak sales are estimated to be around $5 billion.

But now that JNJ stock has seen a rise of 5% in a month will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a higher chance of a rise in JNJ stock over the next month. Out of 378 instances in the last ten years that JNJ stock saw a twenty-one-day rise of 5% or more, 229 of them resulted in JNJ stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 229 out of 378, or about a 61% chance of a rise in JNJ stock over the coming month. See our analysis on Johnson & Johnson Stock Chance of Rise for more details.

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While JNJ stock may rise over the next month, it’s helpful to see how its peers stack up. Check out Johnson & Johnson Peers to see how JNJ stock compares against peers on metrics that matter. You can find more useful comparisons on Peer Comparisons,

Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last ten years’ data

  • After moving -0.7% or more over five days- the stock rose on 57% of the occasions in the next five days.
  • After moving 1.7% or more over ten days, the stock rose in the next ten days on 56% of the occasions
  • After moving 5.2% or more over a twenty-one-day period, the stock rose on 61% of the occasions in the next twenty-one days.

This pattern suggests a higher chance of a rise in JNJ stock over the next five days, ten days, and one month.

Johnson & Johnson Stock Return (Recent) Comparison With Peers

  • Five-Day Return: MRK highest at 1.0%; PFE lowest at -2.9%
  • Ten-Day Return: ABBV highest at 4.4%; PFE lowest at 0.7%
  • Twenty-One Days Return: PFE highest at 10.3%; RHHBY lowest at 3.0%

While JNJ stock may see higher levels, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Medtronic vs. IDEXX Laboratories,

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

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See all Trefis Price Estimates


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