Analyze undervaluation/ overvaluation of Johnson & Johnson with current and 1 Year Forward PE

INSIGHT

Johnson & Johnson is undervalued at both current PE and future earnings estimates

Right Now : Current PE vs 5 year Average PE

Undervalued

Fair price

Based on 5Yr Average PE

196.4

Upside

Current PE versus 5Yr Average PE

10.28 %

1 Year Forward : 5 Yr Average PE & Projected 1Yr Forward EPS*

Undervalued

Fair price

Based on 1Yr Forward EPS

226.5

Upside

5 Yr Average PE & 1Yr Forward EPS

27.16 %

Info: The Johnson & Johnson's current PE is 18.93 ,while its 5 year PE average is 20.9. Its forward PE based on analyst estimates is 16.4

Note: The forward PE ratio (or forward price-to-earnings ratio) is calculated by dividing the current share price of a company by the estimated(1Yr) future (“forward”) earnings per share (EPS) of that company.

Choose Stock, Parameter and Date Range

Start Date *

Furthest date for non subscribers is 09-09-2023

End Date *

Select Parameter *

Analyze undervaluation/ overvaluation of Johnson & Johnson with historical PE and PBV ratios

from 09 Sep, 2023 to 08 Sep, 2025

Restated PE

Sell Zone

67.5% into PE buy sell zone

% time spent below current PE

0 20 40 60 80 100

Strong upside potential

Gains already realized

Out of 502 days, Johnson & Johnson traded 339 (67.5%) days below the current PE of on Restated basis.

Originally Reported PE

Sell Zone

69.1% into PE buy sell zone

% time spent below current PE

0 20 40 60 80 100

Strong upside potential

Gains already realized

Out of 502 days, Johnson & Johnson traded 347 (69.1%) days below the current PE of on Originally Reported basis.

Note: This is a reverse percentile score. Values close to 100% are bad while values close to 0% are good. Days when PE is negative are not considered in the analysis

Restated Data
Originally Reported Data

69.1%

Sell Zone

% Days traded below current PE

18.9

Current PE

16.5

Average PE

11.2

Median PE

226.5

Forward 1Y Price

16.4

Forward PE

10.9

Forward EPS

PE range	Days traded in range	% Days traded in range	Days traded within & below range	% Days traded within & below range
9-10	72	14.3%	72	14.3%
10-11	159	31.7%	231	46.0%
11-12	25	5.0%	256	51.0%
12-19 Current PE is 18.9 Forward PE is 16.42	93	18.5%	349	69.5%
19-26	75	14.9%	424	84.5%
26-28	37	7.4%	461	91.8%
28-31	41	8.2%	502	100.0%
Total	502		502

67.5%

Sell Zone

% Days traded below current PE

18.9

Current PE

16.8

Average PE

16.6

Median PE

226.5

Forward 1Y Price

16.4

Forward PE

10.9

Forward EPS

PE range	Days traded in range	% Days traded in range	Days traded within & below range	% Days traded within & below range
9-10	64	12.7%	64	12.7%
10-11	149	29.7%	213	42.4%
11-17 Forward PE is 16.42	58	11.6%	271	54.0%
17-19 Current PE is 18.9	70	13.9%	341	67.9%
19-26	75	14.9%	416	82.9%
26-28	40	8.0%	456	90.8%
28-31	46	9.2%	502	100.0%
Total	502		502

FAQ

What is the PE ratio?

In its simplest definition, the price-to-earnings ratio (PE ratio) represents the price an investor pays per dollar of a company's earnings.

For example, if a company has a PE ratio of 25, investors are willing to pay USD 25 for each dollar of the company's current earnings. This indicates that investors value the stock at 25 times its current earnings, with an expectation of future earnings growth.

The PE ratio fluctuates based on investor sentiment towards a company. Positive sentiment drives the stock price higher, resulting in a higher PE ratio (investors pay more for each dollar of earnings). Conversely, negative sentiment lowers the PE ratio (investors pay less for each dollar of earnings).
What is the PE buy/sell zone?

The PE buy/sell zone is calculated based on how many days a stock has traded at its current PE level.

To do this, we compare the current PE to the stock’s historical PE performance, to find out how often (for how many days in the past) the stock has traded at its current PE value.

If the stock has usually traded above its current PE level (it’s at a higher PE for the majority of trading days), then the stock is cheaper than usual and in the PE buy zone.

If the stock has usually traded below its current PE level (it’s at a lower PE for the majority of trading days), then the stock is more expensive than usual and in the PE sell zone.
How is the PE buy sell zone useful?

The PE buy sell zone tells you if a stock’s current PE level is unusually high or low, and if a stock doesn’t typically trade at that level. It helps investors identify stocks that are undervalued or overvalued in terms of their typical PE trading behavior.

Investors should keep in mind that the buy zone/sell zone is not a foolproof buy or sell signal. For example, the PE of a stock may have fallen substantially due to adverse events or negative news. Or the PE may have risen sharply after the company has won new orders, made an acquisition, announced a buyback, or some other positive event. PE Buy/Sell Zone signals should be looked at in conjunction with other information.
Why are the number of days different for Restated and Originally Reported data?

This can be because of any of the 2 following reasons:
1. Days when PE is negative are not considered in the analysis. So if only 1 of the Restated or Originally Reported PE is negative and the other is not, then the days will be different

2. Companies have reported Originally Reported data for limited period.

Near 52W High of $181.16

Analyze undervaluation/ overvaluation of Johnson & Johnson with current and 1 Year Forward PE

Analyze undervaluation/ overvaluation of Johnson & Johnson with historical PE and PBV ratios

Restated PE

Out of 502 days, Johnson & Johnson traded 339 (67.5%) days below the current PE of on Restated basis.

Originally Reported PE

Out of 502 days, Johnson & Johnson traded 347 (69.1%) days below the current PE of on Originally Reported basis.

FAQ

What is the PE ratio?

What is the PE buy/sell zone?

How is the PE buy sell zone useful?

Why are the number of days different for Restated and Originally Reported data?

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