Johnson & Johnson Q3 Earnings: Can JNJ Hit Its $1.97 EPS Target?

Johnson & Johnson (NYSE:JNJ) is scheduled to report Q3 earnings results on October 13, 2020.

The company is expected to report earnings of $1.97/share on revenue of $20.05 billion. The consensus earnings per share (EPS) of $1.97/share is based on a poll of 17 analysts and represents a YoY decline of -7.07% over the same quarter last year when the company reported earnings of $2.12/share.

The revenue forecast of $20.05 billion based on a poll of 17 analysts implies a year-over-year (YoY) decline of -3.4%. Last year the company reported $20.729 billion in revenue for the quarter.

Earnings Call Trends

Historically, management has exceeded analyst eps expectations 8 out of the last 8 tracked quarters, and missed revenue expectations 1 quarter.

What are your expectations from Johnson & Johnson's earnings this quarter? Let us know in the comments!

Source: Finbox

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the 2nd Quarter, 2020 the stock price reacted by going up 0.74%.

Source: Finbox

Fundamentals And Technical Analysis

Johnson & Johnson is currently trading at $145.66/share, near its 52-week high of $157/share. Its stock price is up 16.12% in the last year and up 0.39% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 43.23 suggests the company is technically trading in neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

Source: Finbox

The current share price implies a PE ratio of 25.3x, which is slightly higher than its peers' average PE of 11x (source). JNJ's current share price also implies a dividend yield of 2.8%, with a healthy dividend payout ratio of 66.9%. The following table summarizes some other key fundamental ratios:

Source: Finbox

Company Profile: Johnson & Johnson

Johnson & Johnson researches and develops, manufactures, and sells various products in the health care field worldwide. It operates in three segments: Consumer, Pharmaceutical, and Medical Devices.

The Consumer segment offers baby care products under the JOHNSON’S brand; oral care products under the LISTERINE brand; beauty products under the AVEENO, CLEAN & CLEAR, DR. CI:LABO NEUTROGENA, and OGX brands; over-the-counter medicines, including acetaminophen products under the TYLENOL brand; cold, flu, and allergy products under the SUDAFED brand; allergy products under the BENADRYL and ZYRTEC brands; ibuprofen products under the MOTRIN IB brand; and acid reflux products under the PEPCID brand. This segment also provides women’s health products, such as sanitary pads and tampons under the STAYFREE, CAREFREE, and o.b. brands; wound care products comprising adhesive bandages under the BAND-AID brand; and first aid products under the NEOSPORIN brand.

The Pharmaceutical segment offers products in various therapeutic areas, including immunology, infectious diseases, neuroscience, oncology, pulmonary hypertension, and cardiovascular and metabolic diseases.

The Medical Devices segment provides orthopedic products; general surgery, biosurgical, endomechanical, and energy products; electrophysiology products to treat cardiovascular diseases; and vision care products, such as disposable contact lenses and ophthalmic products related to cataract and laser refractive surgery.

The company markets its products to general public, and retail outlets and distributors, as well as distributes directly to wholesalers, hospitals, and health care professionals for prescription use. Johnson & Johnson was founded in 1886 and is based in New Brunswick, New Jersey.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes