JNJ
JNJ
Strong Buy 2026-04-14
Model
DCF
Price at Report
$240.10
Base IV
$294.68
Bear IV
$258.18
Bull IV
$355.48
Entry Zone: 245-276 · Sell Above: 339
Bore Family Office
Valuation Report — Johnson & Johnson (JNJ) • April 14, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 7.35% • Current Price: $240.10
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Johnson & Johnson is a diversified healthcare conglomerate with leadership in pharmaceuticals, medical devices, and consumer health products. Founded in 1886, JNJ operates through three segments: Pharmaceuticals (~40%), Medical Devices (~35%), and Consumer Health (~25%).
JNJ generates ~$18.5B in annual free cash flow, significantly more than its ~$7.9B dividend payout, meaning a DDM severely undervalues the company. DCF captures the full FCF generation capacity including retained earnings reinvested into R&D and acquisitions.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Pharmaceuticals | $40,000M | 40% | +6.0% | 30.0% | Key products: Prevnar, Imbruvica, Darzalex, Stelara, TREMFYA |
| Medical Devices | $35,000M | 35% | +4.0% | 25.0% | Cardiovascular, surgical, diabetes care |
| Consumer Health | $25,000M | 25% | +3.0% | 20.0% | Johnson's Baby, Neutrogena, Band-Aid |
| Blended Growth Rate | — | 100% | +4.5% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 5 — Maturity/Stability: Mature business returning capital via dividends and buybacks. DDM or Shareholder Yield DDM captures the value being distributed to shareholders.
Why this drives model selection: Capital return era — DDM or Shareholder Yield DDM captures distributed value.
📈 DCF Scenarios
$258
🔴 Bear
$295
📊 Base
$355
🚀 Bull
$240.10
Current Price
$220
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 3.0% | 2.5% | 2.5% | 7.35% | $258 | ▲7.5% |
| 📊 Base | 5.0% | 3.5% | 2.5% | 7.35% | $295 | ▲22.7% |
| 🚀 Bull | 6.5% | 4.5% | 3.0% | 7.35% | $355 | ▲48.1% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 3.0% | Stage 2: 2.5% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $19.05B | $17.75B | $17.75B |
| Year 2 | Stage 1 | $19.63B | $17.03B | $34.78B |
| Year 3 | Stage 1 | $20.22B | $16.34B | $51.12B |
| Year 4 | Stage 1 | $20.82B | $15.68B | $66.80B |
| Year 5 | Stage 1 | $21.45B | $15.04B | $81.84B |
| Year 6 | Stage 2 | $21.98B | $14.36B | $96.21B |
| Year 7 | Stage 2 | $22.53B | $13.71B | $109.92B |
| Year 8 | Stage 2 | $23.10B | $13.10B | $123.02B |
| Year 9 | Stage 2 | $23.67B | $12.50B | $135.52B |
| Year 10 | Stage 2 | $24.26B | $11.94B | $147.46B |
| Terminal | — | TV=$512.8B | PV(TV)=$252.3B (63% of EV) | EV=$399.8B |
| Intrinsic Value | — | — | EV $399.8B − Net Debt → Equity / Shares | $258 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.35%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $512.8B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $252.3B). Enterprise Value = PV of FCFs ($147.5B) + PV of TV ($252.3B) = $399.8B. Subtracting net debt gives equity value of $373.1B, divided by shares outstanding = $258 per share.
Base Scenario
Stage 1: 5.0% | Stage 2: 3.5% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $19.43B | $18.10B | $18.10B |
| Year 2 | Stage 1 | $20.40B | $17.70B | $35.79B |
| Year 3 | Stage 1 | $21.42B | $17.31B | $53.11B |
| Year 4 | Stage 1 | $22.49B | $16.93B | $70.04B |
| Year 5 | Stage 1 | $23.61B | $16.56B | $86.60B |
| Year 6 | Stage 2 | $24.44B | $15.97B | $102.57B |
| Year 7 | Stage 2 | $25.29B | $15.40B | $117.96B |
| Year 8 | Stage 2 | $26.18B | $14.84B | $132.81B |
| Year 9 | Stage 2 | $27.09B | $14.31B | $147.12B |
| Year 10 | Stage 2 | $28.04B | $13.80B | $160.91B |
| Terminal | — | TV=$592.7B | PV(TV)=$291.6B (64% of EV) | EV=$452.5B |
| Intrinsic Value | — | — | EV $452.5B − Net Debt → Equity / Shares | $295 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.35%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $592.7B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $291.6B). Enterprise Value = PV of FCFs ($160.9B) + PV of TV ($291.6B) = $452.5B. Subtracting net debt gives equity value of $425.8B, divided by shares outstanding = $295 per share.
Bull Scenario
Stage 1: 6.5% | Stage 2: 4.5% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $19.70B | $18.35B | $18.35B |
| Year 2 | Stage 1 | $20.98B | $18.21B | $36.56B |
| Year 3 | Stage 1 | $22.35B | $18.06B | $54.63B |
| Year 4 | Stage 1 | $23.80B | $17.92B | $72.55B |
| Year 5 | Stage 1 | $25.35B | $17.78B | $90.33B |
| Year 6 | Stage 2 | $26.49B | $17.31B | $107.63B |
| Year 7 | Stage 2 | $27.68B | $16.85B | $124.48B |
| Year 8 | Stage 2 | $28.92B | $16.40B | $140.88B |
| Year 9 | Stage 2 | $30.23B | $15.96B | $156.85B |
| Year 10 | Stage 2 | $31.59B | $15.54B | $172.39B |
| Terminal | — | TV=$747.9B | PV(TV)=$368.0B (68% of EV) | EV=$540.4B |
| Intrinsic Value | — | — | EV $540.4B − Net Debt → Equity / Shares | $355 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.35%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $747.9B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $368.0B). Enterprise Value = PV of FCFs ($172.4B) + PV of TV ($368.0B) = $540.4B. Subtracting net debt gives equity value of $513.7B, divided by shares outstanding = $355 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.3% | $414 | $463 | $529 | $623 | $771 |
| 5.8% | $362 | $398 | $445 | $508 | $599 |
| 6.4% | $314 | $340 | $373 | $414 | $471 |
| 6.8% | $288 | $310 | $336 | $368 | $411 |
| 7.3% | $261 | $278 | $298 | $323 | $354 |
| 7.9% | $234 | $247 | $262 | $281 | $303 |
| 8.3% | $218 | $229 | $242 | $258 | $276 |
| 8.8% | $201 | $211 | $221 | $234 | $248 |
| 9.3% | $187 | $194 | $203 | $213 | $225 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $9.68 | — | — | — | Actual |
| 2023 | $9.82 | — | — | — | Actual |
| 2024 | $10.37 | — | — | — | Actual |
| 2025 | $10.60 | $11.00 | $11.40 | 28 | Estimate |
| 2026 | $11.20 | $11.80 | $12.40 | 27 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $93.8B | — | — | — | Actual |
| 2023 | $96.1B | — | — | — | Actual |
| 2024 | $98.2B | — | — | — | Actual |
| 2025 | $100.5B | $103.5B | $106.5B | 28 | Estimate |
| 2026 | $104.0B | $107.5B | $111.0B | 27 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $220.00 | Range $195–$240
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| David Roden | Goldman Sachs | Buy | $225 | -6.3% |
| David Turkaly | Baird | Outperform | $220 | -8.4% |
| Geoff Meacham | JPMorgan | Overweight | $215 | -10.5% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q4 2025 | $2.69 vs $2.65 | +$0.04 ✅ | $0.0B vs $0.0B | +$0.0B ✅ | Maintained |
👔 Management Quality & Culture
CEO: Robert Wood
Net Insider Buys (12m)
-78,862 shares
Incentive Alignment
❓ Unclear
CEO Background & Track Record
Johnson & Johnson - Wikipedia
The firm designed Johnson & Johnson Plaza across the railroad tracks from the older section of the Johnson & Johnson campus. In 1973, Richard Sellars became chairman and CEO of Johnson & Johnson. In 1976, James
The firm designed Johnson & Johnson Plaza across the railroad tracks from the older section of the Johnson & Johnson campus. In 1973, Richard Sellars became chairman and CEO of Johnson & Johnson. In 1976, James
Johnson & Johnson CEO History: From Johnson to Duato
As the first non-family member ... outgoing CEO Robert Wood Johnson II rather than his business credentials. During his 10-year tenure, Hofmann oversaw steady financial growth and expansion into new product categories like
As the first non-family member ... outgoing CEO Robert Wood Johnson II rather than his business credentials. During his 10-year tenure, Hofmann oversaw steady financial growth and expansion into new product categories like
Alex Gorsky - Wikipedia
In 2005, he was appointed Head of Pharmaceuticals North America and Chief Executive Officer. During his tenure, he created the CEO Diversity & Inclusion Award. He oversaw the growth of its cardiovascular and other franc
In 2005, he was appointed Head of Pharmaceuticals North America and Chief Executive Officer. During his tenure, he created the CEO Diversity & Inclusion Award. He oversaw the growth of its cardiovascular and other franc
Employee Ratings
Overall Rating
4.0/5 ★★★★☆
Culture Signal
Positive
✅ Strengths
- great culture
- recommend
- flexible
Employee Review Excerpts
Johnson & Johnson Reviews (13,111): Pros & Cons of Working A
How satisfied are employees working at Johnson & Johnson?81% of Johnson & Johnson employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Johnson & Johnson 4.0 out of 5 for work life
How satisfied are employees working at Johnson & Johnson?81% of Johnson & Johnson employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Johnson & Johnson 4.0 out of 5 for work life
Johnson & Johnson Reviews in US | Glassdoor
How is the work culture at Johnson & Johnson in US?Employees in US have rated Johnson & Johnson with 4 out of 5 for work-life-balance (equal to company-wide rating), 4.1 out of 5 for diversity and inclusion (equal t
How is the work culture at Johnson & Johnson in US?Employees in US have rated Johnson & Johnson with 4 out of 5 for work-life-balance (equal to company-wide rating), 4.1 out of 5 for diversity and inclusion (equal t
Johnson & Johnson - Great workplace | Glassdoor
Aug 27, 2025 · Director · Current employee, more than 1 year · New Brunswick, NJ · Recommend · CEO approval · Business outlook · Pros · Great culture, honest and smart leadership, flexible work schedule, DB & DC plans,
Aug 27, 2025 · Director · Current employee, more than 1 year · New Brunswick, NJ · Recommend · CEO approval · Business outlook · Pros · Great culture, honest and smart leadership, flexible work schedule, DB & DC plans,
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Strong Buy — Johnson & Johnson (JNJ)
Current price: $240.10 | Analyst Avg PT: $220.00
$258
🔴 Bear
$295
📊 Base
$355
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$276 | Begin position |
| Tier 2 — Add | ≤$276 | Add on weakness |
| Tier 3 — Full | ≤$245 | Full allocation |
| Sell Alert | ≥$339 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Verdict: Strong Buy. The current price of $240.10 sits at or below the bear-case value of $258, implying an unusually favorable downside/upside setup. Tier 1 begins at or below $276, with full allocation reserved for $245 or better.
Bore Family Office • Analysis generated by Lurch • Not investment advice.