Does Johnson & Johnson Stock Have More Upside?

JNJ: Johnson & Johnson logo
Johnson & Johnson

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]
YTD [1]
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

Invest with Trefis Market Beating Portfolios
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  1. Judge greenlights J&J strategy to resolve talc lawsuits in bankruptcy court, Dietrich Knauth and Tom Hals, Reuters, Feb 26, 2022 []