Value
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.2 |
| P/S | 5.8 |
| EV/EBITDA | 0.5 |
| Fwd P/E | 6.2 |
| PEG | 2.9 |
| Analyst target | 4.0 |
- ▸Forward P/E: 20.7x
- ▸PEG: 4.36
JNJ · Why this verdict
Why Johnson & Johnson (JNJ) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
A high-quality healthcare franchise with strong margins, a wide economic moat, and strong price momentum has already surpassed its near-term resistance target, leaving the risk/reward unfavorable for new exposure; the setup favors holding an existing position while monitoring the dividend sustainability concern and the most recent earnings miss.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business sustains strong margins (22%), a return on equity of 26%, and a wide economic moat — a combination indicating durable competitive positioning. A Piotroski score of 7 out of 9 confirms broad financial health. Quality breakdown | Margins remain at or above current levels over the next four quarters as the competitive position is maintained. | ↓Deteriorating |
| CounterFree cash flow converts at only 59% of reported earnings, a concern the quality data explicitly flags; the gap between reported profitability and cash generation means the stated margins may overstate real cash returns, and if FCF conversion continues to lag, the quality franchise story becomes harder to sustain. | ||
The technical configuration shows a golden cross, price trading above all major moving averages, an RSI of 58, and a bullish MACD — collectively consistent with a sustained breakout pattern driven by institutional buying accumulation. Engine gate (passed) | Price holds above its 200-day moving average and volume accumulation continues over the next 12 months. | ↓Deteriorating |
| CounterThe stock is already trading above its near-term resistance target, and the risk/reward is unfavorable at current levels; momentum that has already run past the target may lose its catalyst and consolidate or retrace as near-term buyers take profits. | ||
The dividend is flagged as a potential yield trap — a situation where a high stated yield may prove difficult to sustain if earnings or cash flows deteriorate, posing a risk to income-focused holders. Catalyst breakdown | If this risk materializes, the dividend would be reduced or covered less comfortably, weakening the income case for holding. | →Stable |
| CounterThe wide economic moat and Piotroski score of 7 out of 9 indicate the underlying franchise has financial durability; if cash conversion improves from 59% of reported earnings, the dividend may prove better-supported than the current yield-trap flag suggests. | ||
Earnings estimates are trending upward, providing a positive revision tailwind that can sustain the current valuation even as trailing growth remains soft. Bull case | Consensus EPS estimates continue rising over the next four quarters, validating the upward revision trend. | ↓Deteriorating |
| CounterThe most recent quarter delivered a miss of -5.86%, preceded by an inline result; two consecutive shortfalls against consensus could stall or reverse the estimate revision cycle that the upward trend depends on. | ||
The business sustains strong margins (22%), a return on equity of 26%, and a wide economic moat — a combination indicating durable competitive positioning. A Piotroski score of 7 out of 9 confirms broad financial health.
↓DeterioratingQuality breakdown
- Expectation
- Margins remain at or above current levels over the next four quarters as the competitive position is maintained.
CounterFree cash flow converts at only 59% of reported earnings, a concern the quality data explicitly flags; the gap between reported profitability and cash generation means the stated margins may overstate real cash returns, and if FCF conversion continues to lag, the quality franchise story becomes harder to sustain.
The technical configuration shows a golden cross, price trading above all major moving averages, an RSI of 58, and a bullish MACD — collectively consistent with a sustained breakout pattern driven by institutional buying accumulation.
↓DeterioratingEngine gate (passed)
- Expectation
- Price holds above its 200-day moving average and volume accumulation continues over the next 12 months.
CounterThe stock is already trading above its near-term resistance target, and the risk/reward is unfavorable at current levels; momentum that has already run past the target may lose its catalyst and consolidate or retrace as near-term buyers take profits.
The dividend is flagged as a potential yield trap — a situation where a high stated yield may prove difficult to sustain if earnings or cash flows deteriorate, posing a risk to income-focused holders.
→StableCatalyst breakdown
- Expectation
- If this risk materializes, the dividend would be reduced or covered less comfortably, weakening the income case for holding.
CounterThe wide economic moat and Piotroski score of 7 out of 9 indicate the underlying franchise has financial durability; if cash conversion improves from 59% of reported earnings, the dividend may prove better-supported than the current yield-trap flag suggests.
Earnings estimates are trending upward, providing a positive revision tailwind that can sustain the current valuation even as trailing growth remains soft.
↓DeterioratingBull case
- Expectation
- Consensus EPS estimates continue rising over the next four quarters, validating the upward revision trend.
CounterThe most recent quarter delivered a miss of -5.86%, preceded by an inline result; two consecutive shortfalls against consensus could stall or reverse the estimate revision cycle that the upward trend depends on.
Per-dimension breakdown
Quality
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.6 |
| ROA | 5.7 |
| Gross margin | 9.6 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 4.3 |
| FCF quality | 6.0 |
| Moat | 7.6 |
| Rule of 40 | 3.0 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 26%
- ▸Strong margins: 21%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
2.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.1 |
| EPS growth | 1.8 |
Momentum
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 9.8 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 4.6 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 7.5 |
| Price target | 5.3 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $8,204,186 (0.001% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.6 |
| quality rank | 5.4 |
| growth rank | 6.9 |
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.1 |
| support resistance | 1.5 |
| 52w position | 9.7 |
Risk (lower is worse)
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.4 |
| days to cover | 7.7 |
| volatility | 6.9 |
| put call | 5.0 |
| implied vol | 4.7 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 7.5 |
| news risk | 6.0 |
- ▸Above max pain $125
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.0 |
| dividend safety | 4.2 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:7.8>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:77d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.10
Upside
-8.4%
Downside
7.7%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 49, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:7.8>=5.5. Top dim: Momentum at 7.8; weakest: Growth at 2.9. No conviction either direction.
The strongest dimensions are Momentum at 7.8, Quality at 7.3, and Insider at 7.3; the weakest are Growth at 2.9, Value at 4.0, and Technical at 4.1. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.10 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Margins Moat
Trip ifMargins fall below 15% for 2 consecutive quarters.
- P2Strong Technical Breakout Setup
Trip ifRSI falls below 40 for 2 consecutive weeks.
- P3Dividend Yield Safety Concern
Trip ifFCF as a percentage of net income rises above 80% for 2 consecutive quarters.
- P4Earnings Estimate Revision Trend
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.