JNJ - Embedded Expectations Analysis - 2020 03 17
Johnson & Johnson (JNJ:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 16.7x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management appears concerned about sales growth, generics competition, and their portfolioSpecifically, management may lack confidence in their ability to sustain growth in DARZALEX sales, ex-US market penetration and share, and Orthopedic, Knees, and Trauma segment revenues. Furthermore, they may be concerned about declines in ZYTIGA sales and Trauma market share, generics competition, and the impact of their supply issues and recalls on biosurgery growth rates. Management may also be exaggerating the ability of their portfolio and capabilities to drive global growth, the importance of their dividend, and their focus on patient health. Additionally, they may lack confidence in their ability to rationalize 10% of their SKUs and drive their Consumer Health segment to achieve benchmark performance, and they may be exaggerating the impact of their anti-aging and cleansing innovation on EMEA performanc
Johnson & Johnson is a holding company engaged in the research and development, manufacture and sale of a range of products in the health care field. The company has three business segments: Consumer, which includes a range of products focused on personal healthcare used in the beauty, over-the-counter pharmaceutical, baby care, oral care, women's health and wound care markets; Pharmaceutical, which is focused on six therapeutic areas: immunology, infectious diseases, neuroscience, oncology, cardiovascular and metabolism and pulmonary hypertension; and Medical Devices, which includes products used in the orthopaedic, surgery, interventional solutions, and eye health fields.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.