Home Stock Should you buy or sell JNJ shares after delivering mixed Q3 results?

Should you buy or sell JNJ shares after delivering mixed Q3 results?


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.

The post Should you buy or sell JNJ shares after delivering mixed Q3 results? appeared first on Invezz.

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