Johnson & Johnson Stock To $134?

Core Viewpoint - Johnson & Johnson (JNJ) is facing a pessimistic outlook with a potential target price of $134, driven by moderate operating performance, financial health, and high valuation, making the stock appear unattractive [1] Overview - JNJ has a market capitalization of $462 billion and provides healthcare products globally, including pharmaceuticals and medical devices [5] Financial Performance - JNJ's revenues increased by 4.7% over the past 12 months, rising from $87 billion to $91 billion, with quarterly revenues growing 5.8% to $24 billion [8] - The company's operating income over the last 12 months was $22 billion, resulting in an operating margin of 24.5% [8] - JNJ generated nearly $23 billion in net income, indicating a net margin of about 25.0% [8] - The company has a debt total of $51 billion, leading to a debt-to-equity ratio of 11.0% [8] - JNJ's cash (including cash equivalents) amounts to $19 billion, yielding a cash-to-assets ratio of 9.8% [8] Growth and Valuation - JNJ has experienced an average annual growth rate of 4.0% over the last three years [8] - The stock's valuation appears high relative to the broader market [5] Challenges - Sales of Stelara, a key drug for autoimmune diseases, are declining due to increasing biosimilar competition [3] - Ongoing talc litigation is escalating, with thousands of lawsuits and adverse verdicts creating a legal overhang [3] - Drug pricing reforms under the Inflation Reduction Act are expected to negatively impact revenue across major therapies, tightening margins and challenging growth visibility [3] Stock Performance - JNJ stock dropped 21.7% from a peak of $186.01 on April 25, 2022, to $145.60 on October 27, 2023, while the S&P 500 faced a peak-to-trough decline of 25.4% [9] - The stock has shown resilience, fully regaining its pre-crisis peak by October 1, 2025, and reaching a maximum of $193.72 on October 20, 2025 [9]