# Johnson & Johnson (JNJ.US)

Canonical: https://gigainvestors.com/s/JNJ

Analysis as of: 2026-10-16T07:29:31.900Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $253.28 per share; close as of 2026-10-15.

Estimated value: low $170.43 per share, central $216.73 per share, high $252.14 per share. Buy at or below the central value $216.73 per share. Valuation as of 2026-10-16T07:29:31.900Z; scenarios are not confidence intervals.

Expected annual return: 9.0% at the stated quote. About 9.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.05×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.25×

- FY2018: 0.26×

- FY2019: 0.26×

- FY2020: 0.24×

- FY2021: 0.27×

- FY2022: 0.26×

- FY2023: 0.26×

- FY2024: 0.25×

- FY2025: 0.27×

- LTM to Jun 2026: 0.27×

### moat: pass

- ROIC, median of available years: 47.4%

- ROIC, second-lowest year: 30.6%

- Typical minus recent gross margin: 0.4 pp

- Typical gross margin (annual median): 68.2%

- Recent gross margin (lower of latest and 3-year median): 67.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 4.6%

- ROIC including acquisitions, ten-year median: 26.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 27.6%

- FY2018: 44.9%

- FY2019: 53.4%

- FY2020: 47.6%

- FY2021: 47.5%

- FY2022: 30.6%

- FY2023: 50.1%

- FY2024: 47.4%

- FY2025: 34.7%

- LTM to Jun 2026: 33.8%

### economics: pass

- Owner earnings / net income, 5-yr: 1.13×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $130B

- Net income, five-year total: $115B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 0.4 pp

- Working capital / revenue, change between three-year averages: 2.5 pp

- Working capital / revenue, final three-year average: 21.2%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.18×

- FY2022: 1.17×

- FY2023: 1.08×

- FY2024: 1.21×

- FY2025: 1.10×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 44.9% vs 47.4%

- Per-share earnings: 5.48 to 11.03 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.5%

- Ordinary dilution, 5-year annual growth: -1.9%

- Market cap gain: $181B

- Cumulative retained earnings: $58B

- Diluted shares, 10-year annual growth: -1.5%

- Diluted shares, 5-year annual growth: -1.9%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 9.1%

- Per-share value change: $5.56

- Per-share value, starting three-year median: $5.48

- Per-share value, ending three-year median: $11.03

- Buybacks concentrated in cheaper years (correlation): -0.03

- Average buyback yield: 1.4%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $78B

- Cumulative net income, 10 years: $178B

- ROIC, first three-year median: 44.9%

- ROIC, last three-year median: 47.4%

Chart: Earnings per share; fiscal year observations.

- FY2016: $5.93

- FY2017: $0.47

- FY2018: $5.61

- FY2019: $5.63

- FY2020: $5.51

- FY2021: $7.81

- FY2022: $6.73

- FY2023: $13.73

- FY2024: $5.79

- FY2025: $11.03

### accounting: pass

- Sloan accruals: 1.1%

- Receivables to sales index (DSRI): 0.86×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 5.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.92×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.22×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -1.6%

- FY2017: -12.6%

- FY2018: -4.5%

- FY2019: -5.3%

- FY2020: -5.0%

- FY2021: -1.4%

- FY2022: -1.7%

- FY2023: 7.4%

- FY2024: -5.7%

- FY2025: 1.1%

## Holders

- [John Rogers](https://gigainvestors.com/AI): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [David Hoeft](https://gigainvestors.com/DAC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Prem Watsa](https://gigainvestors.com/FFH): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Russo](https://gigainvestors.com/GR): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Allen Bond](https://gigainvestors.com/JIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [David Katz](https://gigainvestors.com/MAVFX): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Gayner](https://gigainvestors.com/MKL): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Christopher Bloomstran](https://gigainvestors.com/SA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Robert Torray](https://gigainvestors.com/T): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [William Browne](https://gigainvestors.com/TB): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Donald Yacktman](https://gigainvestors.com/YAM): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 6.3% a year for ten years · "Full-Year Sales Guidance Increase: Raised by $2 billion." (finance.yahoo.com, Jul 2025) · sales +6%

Story as of 2026-10-16T09:58:59.773Z; price observation 2026-10-15.

Price needs cash profits to grow 6.3% a year for ten years

- 2025-10-14: JNJ Beats on Q3 Earnings, Ups Sales View, to Spin-off Orthopaedics Unit ([finance.yahoo.com](https://finance.yahoo.com/news/jnj-beats-q3-earnings-ups-160000522.html))

- 2026-06-09: Johnson And Johnson Buys Firefly Bio To Deepen Oncology Growth Story ([finance.yahoo.com](https://finance.yahoo.com/sectors/healthcare/articles/johnson-johnson-buys-firefly-bio-181015396.html))

### Sales · FY2024–2025

sales +6%; source https://www.sec.gov/Archives/edgar/data/200406/000020040626000016/jnj-20251228.htm; observed 2026-02-11.

- FY2016: $72B 

- FY2017: $76B 

- FY2018: $82B 

- FY2019: $82B 

- FY2020: $83B 

- FY2021: $79B 

- FY2022: $80B 

- FY2023: $85B 

- FY2024: $89B 

- FY2025: $94B 

### Gross margin · FY2025

gross margin 67.9%; source https://www.sec.gov/Archives/edgar/data/200406/000020040626000016/jnj-20251228.htm; observed 2026-02-11.

- FY2016: 69.7% 

- FY2017: 66.7% 

- FY2018: 66.8% 

- FY2019: 66.4% 

- FY2020: 65.6% 

- FY2021: 70.3% 

- FY2022: 69.3% 

- FY2023: 68.6% 

- FY2024: 69.1% 

- FY2025: 67.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in drug manufacturers general; annual sales are USD 94.2 billion.

- Source: https://www.sec.gov/Archives/edgar/data/200406/000020040626000016/jnj-20251228.htm (filed 2026-02-11); FY2025: revenue 94193000000; grossProfit 63937000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 67.9% to 69.1% during 2023–25; it earns 47.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2023: grossProfit / revenue = 68.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2024: grossProfit / revenue = 69.1%.

- Source: https://www.sec.gov/Archives/edgar/data/200406/000020040626000016/jnj-20251228.htm (filed 2026-02-11); FY2025: grossProfit / revenue = 67.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); 10-year return on capital observations [[2016,0.5314548903679803],[2017,0.27578189900985656],[2018,0.4488731074370938],[2019,0.5343509902636526],[2020,0.4761200099630699],[2021,0.4750555033275237],[2022,0.30573359250100834],[2023,0.5006159895940637],[2024,0.4738361638271386],[2025,0.34746669031085503]]; median 0.47444583357733117. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 69% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/200406/000020040626000016/jnj-20251228.htm (filed 2026-02-11); Gross margin observations: [[2021,0.7027940055880112],[2022,0.6925115639454932],[2023,0.6859286745969304]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 6 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2016: growth capex 0; upkeep 3226000000; owner earnings 17068000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2017: growth capex 0; upkeep 3279000000; owner earnings 3663000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2018: growth capex 0; upkeep 3670000000; owner earnings 18556000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2019: growth capex 0; upkeep 3498000000; owner earnings 18630000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2020: growth capex 0; upkeep 3347000000; owner earnings 18598000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2021: growth capex 0; upkeep 3652000000; owner earnings 24616000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2022: growth capex 0; upkeep 4009000000; owner earnings 20902000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2023: growth capex 0; upkeep 4543000000; owner earnings 38096000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2024: growth capex 0; upkeep 4424000000; owner earnings 16981000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/200406/000020040626000016/jnj-20251228.htm (filed 2026-02-11); FY2025: growth capex 0; upkeep 4832000000; owner earnings 29475000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); Dividend observations: [[2016,8621000000],[2017,8943000000],[2018,9494000000],[2019,9917000000],[2020,10481000000],[2021,11032000000],[2022,11682000000],[2023,11770000000],[2024,11823000000],[2025,12381000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/200406/000020040626000016/jnj-20251228.htm (filed 2026-02-11); FY2025: cash repurchases 5953000000 USD.

### Are managers owners

Insiders own 0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); JNJ.US SharesStats.PercentInsiders = 0.053 percentage points; cache date 2026-10-16.

### What could break it

"The Company is subject to significant legal proceedings" (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/200406/000020040626000016/jnj-20251228.htm (filed 2026-02-11); The Company is subject to significant legal proceedings

### What the price says

The price assumes cash profits grow 6.3% yearly over ten years; actual growth was 8.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); Ten-year compound average after fade. Initial solved rate 0.09702345752532568. Price 253.28; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 5.578584379110526 → FY2025 12.132625339590023. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $115.99 per share

- 2016-11: $111.30 per share

- 2016-12: $115.21 per share

- 2017-01: $113.25 per share

- 2017-02: $122.21 per share

- 2017-03: $124.55 per share

- 2017-04: $123.47 per share

- 2017-05: $128.25 per share

- 2017-06: $132.29 per share

- 2017-07: $132.72 per share

- 2017-08: $132.37 per share

- 2017-09: $130.01 per share

- 2017-10: $139.41 per share

- 2017-11: $139.33 per share

- 2017-12: $139.72 per share

- 2018-01: $138.19 per share

- 2018-02: $129.88 per share

- 2018-03: $128.15 per share

- 2018-04: $126.49 per share

- 2018-05: $119.62 per share

- 2018-06: $121.34 per share

- 2018-07: $132.52 per share

- 2018-08: $134.69 per share

- 2018-09: $138.17 per share

- 2018-10: $139.99 per share

- 2018-11: $146.90 per share

- 2018-12: $129.05 per share

- 2019-01: $133.08 per share

- 2019-02: $136.64 per share

- 2019-03: $139.79 per share

- 2019-04: $141.20 per share

- 2019-05: $131.15 per share

- 2019-06: $139.28 per share

- 2019-07: $130.22 per share

- 2019-08: $128.36 per share

- 2019-09: $129.38 per share

- 2019-10: $132.04 per share

- 2019-11: $137.49 per share

- 2019-12: $145.87 per share

- 2020-01: $148.87 per share

- 2020-02: $134.48 per share

- 2020-03: $131.13 per share

- 2020-04: $150.04 per share

- 2020-05: $148.75 per share

- 2020-06: $140.63 per share

- 2020-07: $145.76 per share

- 2020-08: $153.41 per share

- 2020-09: $148.88 per share

- 2020-10: $137.11 per share

- 2020-11: $144.68 per share

- 2020-12: $157.38 per share

- 2021-01: $163.13 per share

- 2021-02: $158.46 per share

- 2021-03: $164.35 per share

- 2021-04: $162.73 per share

- 2021-05: $169.25 per share

- 2021-06: $164.74 per share

- 2021-07: $172.20 per share

- 2021-08: $173.13 per share

- 2021-09: $161.50 per share

- 2021-10: $162.88 per share

- 2021-11: $155.93 per share

- 2021-12: $171.07 per share

- 2022-01: $172.29 per share

- 2022-02: $164.57 per share

- 2022-03: $177.23 per share

- 2022-04: $180.46 per share

- 2022-05: $179.53 per share

- 2022-06: $177.51 per share

- 2022-07: $174.52 per share

- 2022-08: $161.34 per share

- 2022-09: $163.36 per share

- 2022-10: $173.97 per share

- 2022-11: $178.00 per share

- 2022-12: $176.65 per share

- 2023-01: $163.42 per share

- 2023-02: $153.26 per share

- 2023-03: $155.00 per share

- 2023-04: $163.70 per share

- 2023-05: $155.06 per share

- 2023-06: $165.52 per share

- 2023-07: $167.53 per share

- 2023-08: $161.68 per share

- 2023-09: $155.75 per share

- 2023-10: $148.34 per share

- 2023-11: $154.66 per share

- 2023-12: $156.74 per share

- 2024-01: $158.90 per share

- 2024-02: $161.38 per share

- 2024-03: $158.19 per share

- 2024-04: $144.59 per share

- 2024-05: $146.67 per share

- 2024-06: $146.16 per share

- 2024-07: $157.85 per share

- 2024-08: $165.86 per share

- 2024-09: $162.06 per share

- 2024-10: $159.86 per share

- 2024-11: $155.01 per share

- 2024-12: $144.62 per share

- 2025-01: $152.15 per share

- 2025-02: $165.02 per share

- 2025-03: $165.84 per share

- 2025-04: $156.31 per share

- 2025-05: $155.21 per share

- 2025-06: $152.75 per share

- 2025-07: $164.74 per share

- 2025-08: $177.17 per share

- 2025-09: $185.42 per share

- 2025-10: $188.87 per share

- 2025-11: $206.92 per share

- 2025-12: $206.95 per share

- 2026-01: $227.25 per share

- 2026-02: $248.43 per share

- 2026-03: $244.44 per share

- 2026-04: $229.85 per share

- 2026-05: $225.33 per share

- 2026-06: $253.97 per share

- 2026-07: $256.35 per share

- 2026-08: $265.85 per share

- 2026-09: $264.74 per share

- 2026-10: $248.61 per share

## Annual estimated value (USD per share)

- FY2016: low $77.07 per share, central $85.69 per share, high $97.18 per share

- FY2017: low $73.69 per share, central $83.01 per share, high $95.41 per share

- FY2018: low $79.80 per share, central $89.89 per share, high $103.32 per share

- FY2019: low $82.43 per share, central $92.89 per share, high $106.82 per share

- FY2020: low $85.55 per share, central $96.13 per share, high $110.21 per share

- FY2021: low $84.30 per share, central $94.38 per share, high $107.79 per share

- FY2022: low $85.64 per share, central $96.53 per share, high $111.03 per share

- FY2023: low $134.49 per share, central $192.39 per share, high $224.68 per share

- FY2024: low $118.30 per share, central $133.53 per share, high $153.82 per share

- FY2025: low $162.67 per share, central $206.84 per share, high $240.63 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:35:16.440Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/200406/000020040626000016/jnj-20251228.htm); period 2025-12-28, filed 2026-02-11.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.