Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 6.40%, lower than industry average of 12.71%.

Growth Trajectory

Profitability

In the growth phase company makes 31.49% profit on every dollar of sales, higher than industry average of 20.42%.

Profitability Trajectory

Risk Profile

Investors expect at least 9.50% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
320.16B USD
Equity Value
288.28B USD
FCF Yield
61.93%
Average ROIC
21.94%
Cost of Capital
9.25%
P/E Ratio
15.89x
Financial MetricMost Recent 12 months (USD)Previous Year (USD)
Revenues90.63B USD88.82B USD
Operating Income or EBIT31.91B USD24.29B USD
Interest Expense842M USD755M USD
Book Value Of Equity78.47B USD71.49B USD
Book Value Of Debt50.76B USD36.63B USD
Cash and Marketable Securities18.88B USD24.52B USD
Number of Shares Outstanding2.41B--
Minority interests0 USD0 USD
Current Stock Price177.02 USD--
Effective Tax Rate16.00%--
Marginal Tax Rate25.00%--

Performance vs Industry

Revenue Growth
-10.68%
2.03%Company
vs
12.71%Industry
Below Industry
Operating Margin
+14.79%
35.20%Company
vs
20.41%Industry
Above Industry
Johnson & Johnson demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate
4.59%
Cost of Capital
8.83%
Return on Capital
8.82%
Reinvestment Rate
52.09%
Terminal value represents 52% of total enterprise value, based on 4.59% perpetual growth and 8.83% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 166.38B USD Add
Present Value (Cash Flow Over Next 10 Years) 153.77B USD Add
Value of Operating Assets 320.16B USD Sub-total
Debt 50.76B USD Subtract
Minority Interests — Subtract
Cash 18.88B USD Add
Value of Equity 288.28B USD Sub-total
Number of Shares 2.41B shares Divisor
Estimated Value per Share (Fair Value) 119.78 USD Total
Current Market Price 177.02 USD Reference

Financial Projections

Total FCF Present Value
153.77B USD
Avg Revenue Growth
5.09%
Avg Operating Margin
30.66%
Avg ROIC
21.94%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue94.56B USD100.62B USD107.06B USD113.91B USD121.20B USD128.52B USD135.82B USD143.05B USD150.14B USD157.05B USD164.27B USD
Growth Rate 4.34% 6.40% 6.40% 6.40% 6.40% 6.04% 5.68% 5.32% 4.96% 4.59% 4.59%
PROFITABILITY
Operating Income33.29B USD32.93B USD33.71B USD34.46B USD35.16B USD37.28B USD39.40B USD41.50B USD43.56B USD45.56B USD47.66B USD
Operating Margin 35.20% 32.73% 31.49% 30.25% 29.01% 29.01% 29.01% 29.01% 29.01% 29.01% 29.01%
EBIT (1-tax)27.96B USD27.66B USD28.32B USD28.94B USD29.53B USD30.65B USD31.68B USD32.62B USD33.45B USD34.17B USD35.74B USD
CASH FLOW
Reinvestment4.10B USD4.36B USD4.64B USD4.94B USD4.96B USD7.19B USD7.12B USD6.99B USD6.80B USD7.11B USD18.62B USD
Free Cash Flow23.86B USD23.29B USD23.67B USD24.00B USD24.57B USD23.45B USD24.56B USD25.63B USD26.65B USD27.05B USD17.12B USD
Terminal Value--------------------404.83B USD
Present Value21.79B USD19.42B USD18.03B USD16.69B USD15.60B USD13.62B USD13.06B USD12.49B USD11.92B USD11.12B USD—
EFFICIENCY
ROIC 25.34% 24.16% 23.83% 23.44% 23.00% 22.97% 22.53% 22.08% 21.62% 21.16% 8.82%
Cost of Capital 9.50% 9.50% 9.50% 9.50% 9.50% 9.36% 9.23% 9.09% 8.96% 8.82% 8.83%
Sales/Capital 1.47x 1.47x 1.47x 1.47x 1.47x 1.01x 1.01x 1.01x 1.01x 1.01x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow ($B)
Reinvestment ($B)