Highly Regarded

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

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

18% Discount TTM fundamentals · sector averages from covered peers

JNJ trades at 24.5× TTM earnings — a 18% discount to its Healthcare sector average of 29.7× in our coverage.

The Numbers

P/E (TTM)

24.5×

Sector avg: 29.7×

P/S (TTM)

6.6×

Sector avg: 7.0×

Market Cap

$610.39B

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 $253.35 24.5×
LLY $1252.00 61.3×
UNH $406.67 21.2×
MRK $145.30 19.2×
PFE $29.43 17.1×

Is the Discount Justified?

October 11, 2026

Johnson & Johnson's P/E ratio of 25.2x positions it slightly below the healthcare sector average of 27.7x. This valuation context follows the recent spin-off of its consumer health division, Kenvue, which aims to streamline operations and refocus the company on its higher-growth pharmaceutical and medical device segments. While J&J benefits from a diversified portfolio and consistent cash flow, the slight discount could reflect the ongoing integration and strategic adjustments post-spin-off, or a perception of more moderate growth compared to some high-growth biotech peers within the broader healthcare sector. The company continues to pursue growth through acquisitions and investments in digital surgery and next-generation therapies.

Sources

Frequently Asked Questions

Is JNJ overvalued or undervalued?
On trailing-twelve-month earnings, JNJ trades at 24.5x versus a Healthcare sector average of 29.7x in our coverage — a 17.6% 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

ABBV PFE MRK UNH LLY