Highly Regarded

Is Johnson & Johnson (JNJ) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Healthcare sector peers in our coverage

In Line TTM fundamentals · sector averages from covered peers

JNJ trades at 25.0× TTM earnings — roughly in line with its Healthcare sector average of 27.8×.

The Numbers

P/E (TTM)

25.0×

Sector avg: 27.8×

P/S (TTM)

6.8×

Sector avg: 6.5×

Market Cap

$624.80B

EPS (TTM): $10.36

Revenue (TTM)

$92.15B

Net income: $25.12B

Healthcare Peer Comparison

How JNJ's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
JNJ This page $259.33 25.0×
LLY $1201.42 58.8×
UNH $418.05 21.8×
MRK $126.81 16.8×
PFE $23.74 13.8×

Is the Multiple Justified?

July 6, 2026

Johnson & Johnson's P/E multiple of 25.0x is slightly below the healthcare sector average of 27.2x. This valuation reflects the company's established position and stable, diversified portfolio across pharmaceuticals and medical devices. The strategic spin-off of its consumer health business, Kenvue, in August 2023, aimed to sharpen J&J's focus on higher-growth, higher-margin segments. While the pharmaceutical pipeline continues to be a key driver, ongoing legal challenges, such as the $45 million verdict in a talcum powder lawsuit in April 2024, which J&J plans to appeal, may exert some pressure on its valuation. The slight discount could indicate market consideration of these litigation risks alongside its otherwise stable operational profile.

Sources

Frequently Asked Questions

Is JNJ overvalued or undervalued?
On trailing-twelve-month earnings, JNJ trades at 25.0x versus a Healthcare sector average of 27.8x in our coverage — a 9.9% discount. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing JNJ with its own Healthcare peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Healthcare names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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Same question, Healthcare peers

PFE UNH MRK LLY ABBV