Is A Rise Imminent For Johnson & Johnson Stock After An 8% Fall In A Month?

JNJ: Johnson & Johnson logo
Johnson & Johnson

Johnson & Johnson stock (NYSE: JNJ) is down 8% in a month, underperforming the broader markets, with the S&P 500 index up 6%. In a recent development, a U.S. appeals court rejected J&J’s attempted use of Texas Two-Step bankruptcy strategy to offload nearly 40,000 lawsuits for its talc products. [1] The company plans to challenge this recent ruling. J&J is currently in the process of separating its consumer health business. The recent decline can partly be attributed to the company’s mixed Q4 results. J&J reported total revenue of $23.7 billion, down 4% y-o-y, and below our forecast of $24.2 billion, partly due to forex headwinds. The company’s Covid-19 vaccine sales were down a significant 57%, while Remicade, which faces biosimilar competition, saw its sales drop 37% y-o-y. However, J&J’s earnings of $2.35 on a per-share and adjusted basis were comfortably above our estimate of $2.24 and reflected a 10% y-o-y growth. This can be attributed to the inclusion of the Covid-19 vaccine related and Consumer Healthcare business spinoff-related costs in the adjusted figure. Looking forward, the company has guided for mid-single-digit growth in sales and earnings for 2023. It expects revenue to be $97.4 billion and adjusted EPS to be $10.55, at the mid-point of the provided range.

Now that JNJ stock has seen an 8% fall in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a high chance of an increase in JNJ stock over the next month. A move of -8% in a month has occurred 63 times in the past ten years. Of those 63 instances, 48 resulted in JNJ stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 48 out of 63, or about a 76% chance of a rise in JNJ stock over the next month. See our analysis of Johnson & Johnson’s Stock Chance of Rise for more details.

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Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using the last ten years’ data

  • After moving -2.9% or more over five days, the stock rose on 60% of the occasions in the next five days.
  • After moving -5.2% or more over ten days, the stock rose on 66% of the occasions in the next ten days.
  • After moving -8.0% or more over a twenty-one-day period, the stock rose on 76% 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, ten, and twenty-one days.

Johnson & Johnson (JNJ) Return (Recent) Comparison With Peers

  • Five-Day Return: BMY highest at 0.4%; JNJ lowest at -2.9%
  • Ten-Day Return: BMY highest at 0.5%; JNJ lowest at -5.2%
  • Twenty-One Day Return: BMY highest at 0.8%; PFE lowest at -14.0%

While JNJ stock looks like it can see higher levels, it is helpful to see how Johnson & Johnson’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

Furthermore, the Covid-19 crisis has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised at how counter-intuitive the stock valuation is for Vicor vs. Williams Sonoma.

With higher inflation and the Fed raising interest rates, among other factors, JNJ stock has fallen 4% in the last twelve months. Can it drop more? See how low Johnson & Johnson stock can go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Feb 2023
MTD [1]
YTD [1]
Total [2]
 JNJ Return 0% -7% 42%
 S&P 500 Return 0% 6% 82%
 Trefis Multi-Strategy Portfolio 0% 12% 251%

[1] Month-to-date and year-to-date as of 2/1/2023
[2] Cumulative total returns since the end of 2016

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  1. J&J’s Talc Bankruptcy Case Thrown Out by Appeals Court, Jonathan Randles and Peter Loftus, The Wall Street Journal, Jan 30, 2023 []