On Tuesday, Johnson & Johnson (NYSE:JNJ) shares gained 2.4% after announcing its most recent quarterly results. The company reported its fiscal third-quarter earnings per share before markets opened, beating analyst estimates.
The company posted FQ3 non-GAAP earnings per share of $2.60, beating the consensus analyst estimate of $2.35. On the other hand, its GAAP EPS of $1.37, missing the average for analyst expectations of $2.17, while revenue for the quarter of $23.34 billion, was below estimates despite increasing by 10.7% Y/Y.
Johnson & Johnson’s FY2021 revenue guidance of $92.8-$93.3 billion is also short of the consensus Street forecast of $93.97 billion. However, it raised its full-year EPS guidance to $9.77-$9.82 from $9.50-$9.60, ahead of the average analyst estimate of $9.64.
Is JNJ stock undervalued?
From an investment perspective, Johnson & Johnson shares trade at an attractive forward P/E ratio of 15.37, making the stock a compelling option for value investors.
Moreover, although analysts expect earnings to decline by 4.42% this year, they also forecast a significant rebound of 7.83% next year, before rising at an average annual rate of 8.89% over the next five years.
Therefore, Johnson & Johnson could be a great option for growth investors targeting quality blue-chip stocks.
Source – TradingView
Technically, Johnson & Johnson shares seem to have recently made an upward breakout from a descending channel formation.
However, the stock still trades significantly below its 100-day moving average and is also far from reaching overbought conditions. Therefore, investors could target extended gains at about $166.76, or higher at $170.48.
On the other hand, if the stock pulls back prematurely, it could find support at about $160.49, or lower at $157.37.
It could be time to invest in JNJ
In summary, although Johnson & Johnson shares are up more than 4% since last week, the stock is still more than 8% from its October highs, thus swinging to a net year-to-date gain of just 4.77%.
Therefore, given the company’s solid FY2021 earnings guidance, it could be time to buy JNJ shares.
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