Does Johnson & Johnson Stock Have More Upside?
The price of Johnson & Johnson stock (NYSE: JNJ) has seen a rise of 5% in a month, while it’s up 4% YTD. This optimism 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 U.S. 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.
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.
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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 (JNJ) 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.
| Returns | Mar 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| JNJ Return | 6% | 2% | 52% |
| S&P 500 Return | 2% | -6% | 99% |
| Trefis MS Portfolio Return | 2% | -9% | 259% |
[1] Month-to-date and year-to-date as of 3/29/2022
[2] Cumulative total returns since the end of 2016
- Judge greenlights J&J strategy to resolve talc lawsuits in bankruptcy court, Dietrich Knauth and Tom Hals, Reuters, Feb 26, 2022 [↩]